| Author | Message | ||
     Sbk2012 Side Hero Username: Sbk2012 Post Number: 3715 Registered: 01-2014 Posted From: 68.5.32.99 Rating: N/A |
Most of the times delisting will result in breaking its bank covenants based on loan terms. So, delist will force a company into bk. In BK, lenders will take control of the company, there is very little that promoters can enjoy in a bk situation. BK is bad for both the promoters and the common shareholders. If you own preferred shares, then the risk may be reduced little bit. | ||
| Inquisitive Junior Artist Username: Inquisitive Post Number: 96 Registered: 09-2014 Posted From: 24.251.166.187 Rating: N/A |
So if the company gets delisted but does not go bankrupt then the promoters can continue to run the company and enjoy the management control while small shareholders cry at the loss of their investment because otc selling is a difficult option for them and they usually have to sell at a big discount? Is there is any reason promoters should fear getting delisted for non-compliance of listing conditions? | ||
| Sbk2012 Side Hero Username: Sbk2012 Post Number: 3713 Registered: 01-2014 Posted From: 68.5.32.99 Rating: |
Ticker usually goes to otc or pink after the delist. You will have a chance to sell. If delinquent, and files bk, then goes to pinksheets. Bk court judge decides whether common gets any value. If common survives, you are lucky, otherwise you will get zero. | ||
| Inquisitive Junior Artist Username: Inquisitive Post Number: 95 Registered: 09-2014 Posted From: 24.251.166.187 Rating: N/A |
What happens to the promoters when a company gets delisted for non-compliance of the conditions of being listed? The minority shareholders suffer because they have no exit option and effectively lose all their money unless they find a buyer who will give peanuts for non-traceable securities. But what about the promoters? Won't they be happy that they don't have to bother about making quarterly financial reports and annual reports and meet other such listing requirements that are costly? And also, they don't have to worry about somebody buying too many shares in the exchanges and potentially getting management control? Consider the case of Deccan Chronicle, it is about to get delisted. |
