Chaori Solar announces restructuring plan to avoid liquidation

Chaori Solar Energy Science & Technology has announced a restructuring plan in an effort to prevent liquidation, Bloomberg reported. Chaori, which became the first company to default in China’s onshore bond market in March, retains only RMB3.06 collateral per RMB100 stock issued. This has resulted in an RMB108.58  gap when factoring in interest, which raises the original securities’ value to RMB111.64. In an equity dilution plan, Chaori will issue 19.9 new shares for every 10 existing shares, with a consortium of nine new investors providing RMB1.46 billion to Chaori to repay debt in turn for 1.68 billion shares from existing shareholders, or 66.6% in the new equity structure.