Chaori Solar Falls 5% After Bondholder Seeks Bankruptcy

Apr 08, 2014 1:17 am ET

April 8 (Bloomberg) -- Shanghai Chaori Solar Energy Science & Technology Co., the first Chinese company to default on corporate bonds in its home market, fell by the daily limit after a bondholder sought to force it into bankruptcy proceedings.

The company, which makes solar panels and components including cells and wafers, fell by 5 percent to 2.46 yuan. It resumed trading today after a Feb. 20 suspension.

Shanghai-based Chaori paid only 4 million yuan ($644,000) of an 89.8 million yuan coupon payment due on March 7 on its 2017 bonds. That prompted a letter on April 3 from Shanghai Yihua Metal Materials Ltd. saying the creditor had submitted a petition to Shanghai No. 1 Intermediate People’s Court seeking bankruptcy restructuring of the manufacturer.

The company ran into trouble after diversifying from manufacturing into building solar farms to produce power. The company, which had two consecutive years of net losses, is scheduled to publish audited accounts on April 28.

Trading may stop again if the court accepts Yihua’s application or if audited 2013 earnings show a net loss, Chaori said last week. Its shares may be delisted if the restructuring fails should the court accept the bankruptcy application.