Hoku and Tianwei announce closing of financing

HONOLULU, HAWAII & CHENGDU, CHINA: Hoku Scientific Inc., a diversified, clean energy company with headquarters in Honolulu, and Tianwei New Energy Holdings Co. Ltd, a leading provider of silicon wafers, photovoltaic (PV) cells, modules and systems, today announced the closing of Tianwei's majority investment in Hoku.

Hoku issued to Tianwei 33,379,287 newly-issued shares of its common stock, representing 60 percent of Hoku's fully-diluted outstanding shares, and granted to Tianwei a warrant to purchase an additional 10 million shares of Hoku's common stock at a price per share equal to $2.52.

In exchange for the shares of common stock, Tianwei has cancelled $50 million of indebtedness that Hoku would be obligated to repay to Tianwei under certain polysilicon supply agreements, and Tianwei is loaning Hoku $50 million through China Construction Bank, as agent. Tianwei has also committed to assist Hoku in obtaining additional financing that may be required by Hoku to construct and operate its Pocatello facility.

Hoku confirmed that it has issued orders to resume full scale plant construction, and the shipment of equipment that had been placed on hold pending Hoku's receipt of financing.

"We are extremely pleased to have closed our financing with Tianwei," said Dustin Shindo, chairman and chief executive officer of Hoku. "With our near-term liquidity crisis behind us, we can now focus on the execution of our polysilicon and PV systems installation business strategies," said Shindo. "We feel that Tianwei is the right strategic shareholder for Hoku's long-term growth."

"A strong relationship with Hoku is very important for us," said Qiang Ding, Chairman of Tianwei Group. "We are excited by the long-term opportunity we have to grow a vertically-integrated PV business together with Hoku on a global scale."