As expected, Tier 2 Chinese PV manufacturer Chaori Solar today confirmed that it has defaulted on its domestic corporate bonds, becoming the first Chinese company to do so.
Executives at Chaori admitted yesterday that the company was
only in a position to pay out 4m yuan ($650,000) of the 89.9m yuan that it owed
its bondholders as of today.
“We will try our best to pay bondholders as soon as
possible, but the company also has other debts,” an executive was quoted as
saying the Wall Street Journal.
Chaori’s default is seen as a watershed for China’s economy,
where untold numbers of companies – not least in the solar sector – have been granted
bailouts and extensions on their loans in recent years.
Beijing is making an example of Chaori, according to
analysts, as it looks to tamp down the froth that has built up across the Chinese
A number of China-based PV manufacturers have defaulted on overseas bonds, most notably Suntech.