Hoku, Solar and Fuel Cell Aspirant, Bankrupt With $1B in Debt

How about a never-been-used polysilicon plant in Idaho?

Eric Wesoff July 06, 2013

Eric Wesoff

Editor-at-Large
Greentech Media

Eric Wesoff is Editor-at-Large at Greentech Media. Prior to joining GTM, Eric Wesoff founded Sage Marketing Partners in 2000 to provide sales and marketing-consulting services to venture-capital firms and their portfolio companies in the alternative energy and telecommunications sectors. Mr. Wesoff has become a well-known, respected authority and speaker in these fields.

His expertise covers solar power, fuel cells, biofuels and advanced batteries. His strengths are in market research and analysis, business development and due diligence for investors. He frequently consults for energy startups and Silicon Valley's premier venture capitalists.

Hoku Corp just filed for bankruptcy in Pocatello federal court according to reports in the Idaho State Journal.

Hoku started out as a fuel cell membrane and materials company, went public in 2005 on little revenue, and then pivoted to becoming a solar polysilicon manufacturer. The company also tried its hand at solar installation in its home state of Hawaii with $1.6 million in 2013 revenue, according to reports in Hawaii's Star Advertiser.

The firm's stock was delisted from the Nasdaq last year. The company is now $1 billion in debt to 30 creditors including Tianwei and the Idaho plant's main construction contractor. Hoku is a subsidiary of Tianwei New Energy Holdings, which is an affiliate of China South Industries Group Corporation (CSGC). CSGC is a mammoth firm with 191,000 employees. Tianwei manufactures polysilicon, wafers, cells and modules.

In 2012, in a case of questionable timing, Hoku was looking to open up a long-threatened $700 million polysilicon plant in Pocatello, Idaho -- a factory that sought to supply a transitioning and hobbled market. Hoku's CFO and CEO resigned around that time while the company was having difficulty paying its Idaho electric bill. Hoku had received $280 million in prepayments from PV panel manufacturers such as Hanwha SolarOne, Tianwei New Energy, Jinko Solar, and and a small prepayment from Suntech for polysilicon to be delivered between 2012 and 2016. The firm has been threatening to build the Idaho factory since 2008 -- when polysilicon was more expensive than today.

The firm never really had a technological differentiation in silicon manufacturing or in proton exchange membrane (PEM) fuel cells. Nor did it seem to have a strategic business plan, other than to go public and pay its executives.

Perhaps its Chinese Fortune 1000 conglomerate parent will engineer a financial rescue of the firm.