Hoku Scientific Inc., a maker of fuel cell components, will supply polysilicon to Sanyo Electric Co. under a seven-year agreement valued at as much as $370 million. Hoku's shares more than doubled in value.
Hoku Materials, a division of Hoku Scientific, will produce the polysilicon for use in solar-fuel cells beginning in 2009, the company said in a statement. The agreement calls for Kapolei, Hawaii-based Hoku to supply Sanyo, the world's biggest maker of rechargeable batteries, through December 2015.
Osaka, Japan-based Sanyo will pay $2 million when the contract is signed and place about $111 million, or 30 percent of the total, in escrow, Hoku said in the statement.
Hoku will begin building a $260 million plant to produce the solar cells and will seek as much as half that amount in loans. Each company has the right to terminate the agreement if Hoku can't secure the financing, according to the statement.
Hoku's shares rose $3.80 to $6.90 as of 4:30 p.m. New York time in Nasdaq Stock Market composite trading. Before today, they had fallen 66 percent in the past year. Sanyo's American depositary receipts fell 35 cents to $7.85. Each ADR represents five ordinary shares.
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