Narrative
Full Description
Project narrative
On October 19, 2010, China Construction Bank entered into a $29 million USD loan agreement with Hoku Corporation — a now-defunct Idaho-based clean energy company that specialized in polysilicon production for solar panels — to support the company’s ongoing project financing. The proceeds were used by the borrower for general corporate purposes, including costs associated with the construction and operation of its polysilicon manufacturing facility in Pocatello, Idaho. The maturity of the loan is approximately three years from the date of first disbursement, and the interest rate is LIBOR plus 2% (2.30% as of March 31, 2011). The loan was fully secured by standby letters of credit drawn by Tianwei in Chengdu, China and issued to China Construction Bank’s Sichuan Branch, in favor of its Singapore Branch. Hoku also entered into a reimbursement agreement with Tianwei, under which it agreed to cover all interest, fees, and expenses incurred by Tianwei related to the standby letters of credit. As of March 31, 2011, the entire $29 million USD was outstanding.
Staff comments
1. The entirety of the loan agreement is not available. However, Form 10-K from the company is available for descriptions of the loan. It can be accessed at https://getfilings.com/sec-filings/110715/HOKU-SCIENTIFIC-INC_10-K/. 2. Hoku Corporation was a U.S.-based clean energy company headquartered in Pocatello, Idaho. It began in fuel cell technology before transitioning to solar manufacturing. In 2009, it became majority-owned by China’s Tianwei New Energy Holdings. Hoku declared bankruptcy in 2013, and its assets were liquidated. 3. AidData estimates the interest rate by adding the margin (2%) to 6 months LIBOR.