Chaori default will provide resolution template

The resolution of China’s first onshore bond default will mark out a path for any further defaults, which are expected to happen this year.

The bond default by Shanghai Chaori Solar Energy Science and Technology should provide a template for resolving similar issues in addition to breaking the implicit guarantee inherent in China’s financial market.

A bondholder meeting will be held on March 26 to decide the next steps namely, whether to compel the bond underwriter -  China Securities - to pursue a civil lawsuit against the company, sell some of the collateral backing the defaulted securities, or participate in restructure, negotiate with or bankrupt the company. 

However, according to sources and legal experts, entering a bankruptcy or restructuring process would be the last option for both the company...

¬ Haymarket Media Limited. All rights reserved.

FinanceAsia has updated its subscription model.

Registered readers now have the opportunity to read 5 articles from our award-winning website for free.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences.

To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222

Article limit is reached.

Hello! You have used up all of your free articles on FinanceAsia.

To obtain unlimited access to our award-winning exclusive news and analysis, we offer subscription packages, including single user, team (2-10 users), or office-wide licences. To help you and your colleagues access our proprietary content, please contact us at subscriptions@financeasia.com, or +(852) 2122 5222