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Hoku Scientific faces trouble raising capital

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CIOL Bureau
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BANGALORE, INDIA: It seems to be capital woes for the Hawaii-based fuel cell manufacturer Hoku Scientific Inc as it struggles to raise funds for a polysilicon plant it had planned to build.

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Industry news sources said the company would now be forced to postpone completing construction of a polysilicon plant in Idaho if it is unable to raise capital. Further, the fuel cell-maker might also find it tough in such circumstances for at least one year.

The funding part is also a major aspect of Hoku's current situation as it would be able to meet its contractual demands to its customers, if it gets financing.

Reports said the company, however, may have to buy polysilicon, the raw material used to make solar panels, on the spot market for resale to its customers to meet contractual delivery obligations. Here is where the company might find the going tough.

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Sources said the the company remains focused on raising capital, increasing revenues and reducing expenses even as the current market conditions remain challenging.

Hoku has been evaluating a variety of fund-raising alternatives and also has modified payment terms in purchase orders with more than 20 of its vendors in a bid to structure payment plans for amounts past due and for those to be invoiced in the future, the reports added.

The company had narrowed its fiscal 2009 fourth-quarter loss owing to cut in operating expenses. However, funding of operations might yet be a problem. Hoku shed $904,000 for the quarter ended March 31, compared with a loss of $2.1 million in the year-ago period. Meanwhile revenues plummeted 82 per cent to $112,000 from $621,000.

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