SHARES of Shanghai Chaori Solar Energy Science & Technology Co., the firm that roiled global markets in March with China’s first domestic bond default, will be suspended from trading Wednesday because the solar-equipment maker posted consecutive losses over the past three years.

    The Shenzhen Stock Exchange will also delist bonds issued by Chaori Solar on July 8 for the same reason. The bonds were suspended from trading last July.

    Under China’s securities law, a listed firm reporting three straight years of losses has the listing of its shares suspended, which means investors are not able to trade the shares.

    A return to profit is a condition for the listing to be restored. But for Chaori Solar, a turnaround this year is highly unlikely. It warned in late April it faced liquidity problems and would still have difficulties repaying its debt.

    Chaori Solar on March 7 failed to pay 89.8 million yuan (US$14.7 million) in interest on a 1 billion yuan bond sold two years ago.

    While other companies have seen payments slip, government officials, local banks and others have usually stepped in to prevent a default. The Chaori Solar default was widely seen as an indication that the government is increasingly likely to allow defaults as a way to inject discipline into the fast-growing debt market.

    China’s solar industry has suffered from severe overcapacity problems and falling prices for photovoltaic cells.

    Chaori Solar reported a net loss of 107.3 million yuan in first quarter following a 2013 net loss of 1.45 billion yuan. It had overdue loans totalling nearly 3 billion yuan at the end of last year. (SD-Agencies)