Chaori puts bondholders in a tricky position

Shanghai Chaori Solar Energy Science and Technology’s restructuring plan has left few options for bond investors, who may still face a big loss in the company’s bond default.    

Shenzhen-listed Chaori Solar, which in March became the first Chinese company to default on its onshore corporate bonds, unveiled a solution on Tuesday for its bond’s principle and interest payments.

In March, Chaori failed to pay all of the Rmb89.8 million interest on the Rmb1 billion five-year bond it issued in 2011. It also failed to hold a bond investors meeting to decide whether to restructure the company andor sell some of the collateral backing...