Narrative
Full Description
Project narrative
On February 24, 2012, China Merchants Bank entered into a $10 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 capital and operating expenditures. The proceeds were used by the borrower primarily to finance operating and capital expenses associated with the ongoing construction and development of its polysilicon manufacturing facility in Pocatello, Idaho. The maturity of the loan is five years, and the interest rate is LIBOR plus 2%, payable annually. The loan was fully secured by a standby letter of credit drawn by Tianwei New Energy Holdings Co., Ltd. — Hoku’s majority shareholder and a Chinese state-owned enterprise — and issued to China Merchants Bank as collateral. Hoku had already borrowed the full $10 million USD available under this agreement as of the signing date, bringing its cumulative borrowing from China Merchants Bank to $78 million USD.
Staff comments
1. The entirety of the loan agreement is accessible at https://www.marketscreener.com/quote/stock/HOKU-CORPORATION-11050684/news/Hoku-Corporation-Receives-10-Million-Loan-from-China-Merchants-Bank-39434595/ 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.