A mainland contractor won an auction and will pay $8.3 million to purchase a $700 million failed polysilicon plant in eastern Idaho developed by Honolulu-based Hoku Materials.
Hoku Materials, a subsidiary of Honolulu-based Hoku Corp., filed for bankruptcy in July and the auction Tuesday was intended to recoup some funds for creditors.
The contractor, Washington state-based JH Kelly, is one of those creditors, and is owed more than $25 million for work done at the defunct plant. JH Kelly placed the highest bid for the plant in Pocatello, Idaho.
JH Kelly was also the highest bidder when the plant was first auctioned in October, but a federal bankruptcy judge said the auction had to be redone because it wasn’t held in accordance with a court order.
Hoku broke ground in 2007 on a 67-acre parcel outside of Pocatello. It halted construction in May 2012 and laid off 100 workers after a global collapse in polysilicon prices. Hoku secured a number of concessions from the city, including a 99-year ground lease for the land at $1 a year.
In its bankruptcy filing Hoku Materials listed assets of $7.4 million and liabilities of $780 million. Hoku Solar, the company’s second subsidiary, which sells and installs PV systems, listed no liabilities.
Founded in 2001 and once heralded as one of Hawaii’s most promising technology startups, Hoku Corp.’s troubles began in 2009 with a decline in prices for polysilicon, the raw material used to make solar panels. Hoku had used advance deposits from polysilicon customers to fund construction of the plant. However, customers began canceling their contracts as prices fell and asked for their deposits to be refunded.
Running short on cash, Hoku executives turned to Chinese investors, who took control of the company in 2009. The investors, led by Tianwei New Energy Holdings Co., were unable to complete construction of the plant despite pouring more than $300 million into the project, most of which was borrowed from Chinese banks.
