Chaori default proposal creates more doubt

Chaori Solar’s default on its Rmb1.09 billion $195 million bond may not lead to an acceptable template for resolving similar issues.

The Shenzhen-listed solar company, which in March became the first Chinese company to default on its onshore corporate bonds, is likely to see the bond bailed out by state-owned enterprises.

“According to our calculation, the principle and the interest of the Chaori bond can be fully paid, if the restructuring proposal is well executed, and the related parties exercise the guarantee,” China Securities, the trustee of the bond, said.

Chaori will collect a total Rmb1.96 billion from the sale of new shares to...