Feb. 22 (Bloomberg) -- Shanghai Chaori Solar Energy Science & Technology Co., a Chinese maker of solar cells, said it may not be able to pay interest due March 7 to bond investors because of liquidity difficulties.
The company may post losses of as much as 1.1 billion yuan ($176 million) for last year, the company said in a statement dated Feb. 21 to the Shenzhen Stock Exchange. It’s uncertain that controlling shareholder Ni Kailu and his daughter can reach a final agreement with Qinghai Muli Coal Development on a stake transfer, according to the statement.
“At present, the company’s liquidity difficulties haven’t eased and funding remains relatively tight,” Chaori Solar said in the statement. Its ability to make timely interest payments to bondholders is “uncertain,” according to the statement.
Chinese solar companies including Chaori Solar, LDK Solar Co. and GCL-Poly Energy Holdings Ltd. have reported profit declines or losses after a global equipment supply glut depressed prices. Chaori Solar’s long-term credit rating was cut to AA- from AA by Pengyuan Credit Rating Co. last month.
Chaori Solar has 1 billion yuan of outstanding five-year debt that mature in March 2017. The company is due to make the first interest payment on March 7.
No company has defaulted on publicly traded debt in China since the central bank began regulating the market in the late 1990s, according to Moody’s Investors Service.
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