Chinese solar company LDK Solar Co Ltd has this week defaulted on a $24 million dollar bond.
This comes just a month after rival company Suntech Power Holdings Co Ltd defaulted on $540 million in US bonds, sparking fears about other Chinese companies being unable to repay debt.
Shares in LDK Solar have fallen internationally; as of Tuesday morning German listings in the company fell 26 per cent and the New York Stock Exchange opened down 10 per cent Monday.
LDK has release a statement outlining a loan with two bond holders to repay the remaining debt.
In a bid to expand manufacturing operations, many Chinese solar companies have fallen into debt over the past two years.
While this has sent solar panel prices down dramatically, the overcapacity along with falling government subsidies has prompted many firms around the globe to file for insolvency.