Future of Ultrasonic still uncertain

The future of Ultrasonic AG, the German holding company of Chinese footwear maker Ultrasonic Group, is still uncertain

after the turbulent events of the last two weeks. Shares plunged from almost 7 euros to 1 euro after news broke on 16th September that the company's CEO Qingyong Wu and COO Minghong Wu had disappeared and with them most of the company's cash.

Shares recovered a bit and climbed to 3 euros last week after Qingyong Wu contacted Ultrasonic's CFO Clifford Chan, claiming he had lost his mobile phone and thus wasn't reachable while seeking medical treatment in the Philippines. He denied running away, stating in an interview that took place at the company's Quanzhou location: "There is a rumor online and out in society that I took the money and ran away. That has caused huge damage to my reputation and the company. I reserve the right to press charges regarding the rumor spreading."

Wu also said he would come back to the company and return the funds but he and his son Minghong were already dismissed by Ultrasonic's supervisory board in its September 17th meeting. CFO Clifford Chan, who was due to resign for family reasons as of 30th September, withdrew his resignation and will remain CFO to support the company in this difficult times and to clarify the current situation. In addition, Yeung Man Kin, who should have assumed the role of CFO from 1st October 2014, withdrew his contract in view of the recent events.

The share price has since fallen further, reaching 2.07 euro as of this morning. Though the company is in command of a relevant six-figure amount to fulfill its regular payment obligations, a 60 million US dollar credit facility together with interest of more than 180,000 US dollar has been accelerated unexpectedly as of 17th September, being immediately due and payable. The creditors agreed, however, to enter into further negotiations with Ultrasonic to determine if potential insolvency procedures could be avoided. Chan and the supervisory board are also currently in consultation with their legal advisors to assess the exact legal implications of the claim.

Ultrasonic AG was founded 2011 in Cologne as the German holding of the Chinese Ultrasonic Group. The company designs, produces and sells sandals, slippers and shoes soles and established the Ultrasonic brand for its premium urban footwear collection, targeted for the domestic market.