Hammered by plunging polysilicon prices, Honolulu-based Hoku Corp. was forced to lay off 100 workers and halt construction on a plant in Idaho that was to produce the main component used in photovoltaic solar panels, company officials said Tuesday.
Hoku, which has posted financial losses in 20 out of the past 21 quarters, also announced that it has hired an investment bank to restructure $278 million in debt the company has racked up since breaking ground on the polysilicon plant in 2007. The plant in Pocatello is being built by Hoku Materials, a subsidiary of Hoku Corp.
Hoku officials also said several construction firms that had filed liens against Hoku have begun foreclosure proceedings against the company. The officials would not comment on whether Hoku Corp. is planning to file for bankruptcy.
"The company is exploring all options to restructure its Hoku Materials-related debts and obligations. It would be premature to make any statements about the approach that will ultimately be selected," a Hoku spokesman said in response to questions from the Star-Advertiser.
Hoku officials hired Los Angeles-based Imperial Capital LLC to oversee the restructuring. Imperial Capital was one of the consultants in the Hawaiian and Aloha airlines bankruptcy cases.
Hoku Corp.’s liabilities include $74.4 million owed by Hoku Materials, according to a news release from the company. Hoku Corp. also listed cash of $7.7 million and other assets of $6.7 million.
Prices for polysilicon have fallen sharply in recent years due to an oversupply in the global market. The spot for polysilicon fell to $23.17 per kilogram last week from a peak of $475 a kilogram four years ago, according to Bloomberg News Service.
Falling polysilicon prices made it difficult for Hoku to continue raising funds to build the $700 million Idaho plant. As the construction fell behind schedule, some of Hoku’s customers who prepaid their polysilicon orders began canceling their contracts and asking for refunds.
Hoku, a one-time success story for Hawaii’s technology sector, was forced to sell a majority stake to a Chinese firm in September 2009. The company, Tianwei New Energy Holdings Co., injected fresh capital into Hoku and helped line up more than $300 million in loans from Chinese banks for construction of the Idaho plant.
As part of the restructuring announced Tuesday, Hoku said it closed a newly formed unit that was to have marketed and sold Tianwei solar modules in North America. Hoku laid off three full-time employees at Los Angeles-based Tianwei Solar USA. Hoku said those responsibilities will be transfered to Hoku Solar, a division of the company that designs and builds large-scale photovoltaic projects in Hawaii.
Hoku Solar, which is the sole source of revenue generation for its parent company, will not be included in the restructuring, said Scott Paul, Hoku Corp. chief executive officer.
Hoku Solar reported a 500 percent increase in revenue for the quarter ended Dec. 31, 2011, compared with the same three-month period a year earlier.
"Hoku Solar is a stand-alone business that operates on its own sales revenue," Paul said. "As such, Hoku Solar is not planned for inclusion in the potential Hoku Corp. and Hoku Materials restructuring announced earlier (Tuesday)."
Hoku Solar’s portfolio includes some of Hawaii’s largest utility-scale photovoltaic projects to date, including a 7-megawatt solar power facility planned for Kauai.
