March 11 Solar equipment producer Chaori Solar
, which last week recorded China's first domestic
bond default, said on Tuesday it could be delisted from the
Shenzhen stock exchange after posting a preliminary loss for a
third year in a row.
China's securities law states that a company has to suspend
trading of its shares after making a net loss for three
consecutive years and will be de-listed if it fails to make a
profit in the following year.
This means Shanghai Chaori Solar Energy Science and
Technology Co Ltd could be de-listed if it fails to make a
profit in 2014.
China's solar industry has suffered from severe overcapacity
and falling prices for photovoltaic cells.
Chaori Solar recorded a default last Friday, when it missed
an interest payment on a bond. It warned that it would only pay
out less than five percent of the 89 million yuan ($14.5
million) in interest due on 1 billion yuan worth of bonds issued
The company suspended trading in its shares on Feb. 19.
The group, which had 6.5 billion yuan in liabilities
outstanding at end-September, reported a 2013 preliminary net
loss of 1.33 billion yuan ($216.67 million), it said in a filing
released on the Shenzhen exchange on Tuesday.
The company's Chaori-11 bond also faces
delisting risks, it said in the statement.
Chaori could not be reached for further comment.
($1 = 6.1385 Chinese Yuan)
(Reporting by Hong Kong newsroom and Shanghai newsroom. Editing
by Jane Merriman)