SHANGHAI Chaori Solar Energy Science & Technology Co., the first Chinese company to default on corporate bonds onshore, plans to sell assets outside the country to raise cash and repay bond holders.

    Shenzhen-listed Chaori Solar will seek buyers for solar farms in Greece, Bulgaria, Italy and the United States, vice president Liu Tielong said yesterday. Chinese banks that had previously agreed to provide 800 million yuan (US$130.3 million ) in loans if the company faced a temporary cash squeeze “have no willingness to lend,” he said.

    “Potential buyers aren’t determined yet,” Liu said. “The solar plants are worth more than 1 billion yuan and are more than enough to cover the bond interest.”

    The solar cell maker paid only 4 million yuan of a 89.8-million-yuan coupon payment due Friday on its 2017 bonds, according to Liu. The failure signals the government may back off its practice of bailing out companies after promising markets a “decisive” role in the allocation of resources.

    China Securities Co., which managed the Chaori Solar note sale in 2012, plans to send a notice to bond holders today or tomorrow about convening a meeting, Beijing-based spokeswoman Zhang Jing said yesterday. The meeting date hasn’t been decided and it isn’t clear if most investors are individuals, she said.

    According to Chaori Solar’s bond prospectus, Guangfa Bank Co.’s Shanghai branch and China Citic Bank Corp.’s Suzhou branch agreed to extend 800 million yuan in loans to the manufacturer if it faced a temporary cash squeeze. Chaori Solar is still talking to lenders for support, Liu said.

    Chaori Solar sold the five-year notes with a variable annual coupon starting at 8.98 percent. The notes yielded 22 percent before trade was halted July 8, exchange data show.

    Chaori Solar ran into trouble because it expanded into building solar farms to produce power rather than just manufacturing panels, which is much cheaper, according to Wang Xiaoting, a Beijing-based analyst at Bloomberg New Energy Finance. The farms earmarked for sale could indeed bring in 1 billion yuan if they are fully commissioned, Wang said. (SD-Agencies)