NEW YORK (AP) ¿ Shares of solar products maker Hoku Scientific Inc. soared in morning trading after it said it set payment dates for a polysilicon supply deal it holds with Solarfun Power Holdings Co. Ltd.
Shares of Hawaii-based Hoku jumped 42 cents, or 18 percent, to $2.77 in midday trading. Solarfun shares fell 15 cents to $7.32 per share.
In May 2008, Hoku's subsidiary Hoku Materials Inc. agreed to supply polysilicon to Solarfun unit Solarfun Power Hong Kong Ltd. over a ten-year period. Polysilicon is a key material used in making solar energy products.
Hoku plans to supply the product once construction is completed at its Idaho polysilicon manufacturing plant. In September, Hoku said construction was scheduled to be completed two phases. A 2,500 metric tons of polysilicon production capacity should be completed by March 2010 and the full 4,000 metric tons of capacity should be completed by the end of 2010.
Under the agreement, Solarfun had paid $37 million as a prepayment for future polysilicon deliveries. As of last week Solarfun still held a $13 million past-due balance that was due between July and October. Hoku said last Friday Solarfun paid $8 million of its past-due balance and agreed to pay $4 million in March 2010 and $1 million when Hoku begins its shipment of polysilicon to the China-based solar cell maker.
Solarfun agreed to pay a remaining $5 million balance due January 2010 in $1 million monthly increments in each of the five subsequent months after the month of the first shipment.