Tianwei New Energy, the solar PV manufacturing arm of electrical component company Boading Tianwei Baobian Group Co, has filed for bankruptcy alongside the companys other units due to an inability to repay debts that have mounted since Aprils bond default.
The default of April 21 was the first time that a state-backed Chinese firm had been officially unable to pay a public bond, prompting fears of a similar contagion throughout the Chinese solar industry.
At the weekend, Boading Tianwei confirmed that it is insolvent and would be unable to pay its debts, announcing plans to meet with backers this week to outline a bankruptcy plan.
In a statement issued on the China Foreign Exchange Trade System, Tianwei said: "Due to the global economic slowdown since 2011, the overcapacity in new energy and falling prices, the Tianwei group and some of its subsidiaries new energy enterprises gradually fell into more critical financial and operational crisis."
The bond default in April concerned the missed payment of $13.8 million, with Tianwei failing to secure a government bailout, as had previously been the standard policy for state-backed companies. Baoding Tianwei Group is a unit of China South Industries Group Corp, which is government-owned but has been suffering huge losses since last year as a result of the solar and wind downturn.
Tianweis troubles may have had a knock-on effect on fellow Chinese clean energy firm Yingli, which in 2007 issued a $282 million loan to the company that may never be paid back given Tianweis bankruptcy filing.