Chaori Solar receives guarantee for most of defaulted bonds
Oct 8, 2014 - Troubled photovoltaics (PVs) maker Shanghai Chaori Solar Energy Science & Technology (SHE:002506) has received a guarantee for most of its CNY 1 billion (USD 163m/EUR 129m) worth of defaulted notes.
State-backed fund China Great Wall Asset Management Corp was the one to guarantee up to CNY 788 million, according to a statement published on the Shenzhen Stock Exchange on Monday. Separately, one of the nine investors that restructure Chaori Solar, namely Shanghai Jiu Yang Investment Management Center, said it will provide about CNY 92 million.
In total, the group of nine investors will give to Chaori Solar some CNY 1.46 billion to pay back debt in exchange for a combined stake of 66.6% in the restructured firm. The business reorganisation plan needs to be approved by creditors and the local court, otherwise the company will be liquidated.
Chaori Solar failed to make the full CNY-89.8-million coupon payment on its CNY-1-billion bond by the due date, March 7. This turned it into the first company to default on the bond market in China. In June, a Chinese court started proceedings for the firm’s bankruptcy restructuring upon the request of a supplier.
In late August, Bloomberg quoted Chaori Solar’s vice president Liu Tielong as saying that the firm had resumed production of PV panels at its factory in Shanghai.