China Solar Giant GCL Poly Defaults on $500 Million Dollar Bond

(Bloomberg) -- GCL-Poly Energy Holdings Ltd. defaulted on a $500 million bond after ending an exchange offer with existing bondholders.

The default on the three-year, 7.1% note due Jan. 30 will trigger a cross default after the offer was terminated, the Chinese solar giant said in a statement to the Hong Kong stock exchange. The cross default will have “a material negative impact” on the company’s business and financial position, it said.

GCL Poly announced the exchange offer for the notes last month, saying its cash position and liquidity was deteriorating due to a delay of subsidy payments. As of June 30, the company had net current liabilities of 6.5 billion yuan ($1 billion), which cast doubt about its ability to continue as a going concern, according to a statement on Dec. 23.

The firm hasn’t received any notice or request for immediate payment of debts, according to Monday’s statement.

The company’s Hong Kong-listed shares have almost doubled in Hong Kong this year.

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