I am short CMEDY stock.
I will be honest: This is one of the weirdest situations I have ever been involved in. But instead of offering opinions or commentary on my thinking behind my position, I want to lay out facts related to the case and hopefully bring a little clarity to the situation.
CMEDY has two convertible notes outstanding: 6.25% of 2016 and 4% of 2013. CUSIPs are 169483AE4 and 169483AC8 respectively. They are in default due to missed coupons.
Here are two dealer runs from the last few days, the first from Barclays and the second from DB (I've removed my sales coverage information):
On June 15th, a wind-up petition against China Medical Technologies was filed in the Cayman Islands. I have uploaded the relevant documents. In one of the filings, this is written:
"The Company has failed and refused to communicate with the Petitioner with respect to the events of default or the amounts now due and owing under the Notes. As noted above, the Company failed to respond to the Petitioner’s notices of defaults and of acceleration. The Petitioner sent a copy of the 2 March Notice to the Company's counsel as identified in the 6.25% lndenture, in response to which the Petitioner received a letter advising that such counsel no longer represented the Company in any matters. Additionally, the Company and its counsel did not respond to email communications from counsel to the Petitioner.
Petitioner is advised that counsel to the 6.25% Notehoìders and the 4% Noteholders (together, the ”Noteholders”) has been unsuccessful in its efforts to engage with the Company regarding the events of default.Relevant Documents:
Winding-Up Petition - Sealed
First Affidavit of Steve Cimalore - Sealed
CMEDY stock has been on a tear in the last week. Here is the YTD chart.