Mercator Ltd in its Extraordinary General Meeting (EGM) held on Oct 28, 2010 issued 1.88 Crore warrants to its promoters and persons acting in concert.Each warrant gave the holder the right to convert it into one share of Mercator Ltd by May 08, 2012
The warrants were priced at Rs.55 per warrant.This, despite the fact, that the prevailing price of Mercator then was around Rs.67 per share.This made the warrants in the money from Day 1 and caused corporate governance misgivings.
Since then, Mercator stock has crashed to around Rs.20.25 per share.Not surprisingly, the promoters have chickened out and have not exercised their option to convert the warrants to shares .As a result, their application money (around 23 Crores) has been forfeited.
The Gods surely have a good sense of humor.