I was holding Essar steel stocks for the longest time, I recently heard news that Arcelor Mittal has bid for Essar steel and completed the deal. I was expecting to get some money for my unlisted shares, but to my surprise, the shares have gone missing. What is happening?
In this case, the stock has gone through a ‘Capital reduction’ without payout. This means that the entire existing shareholders of the company - both Equity & Preference shareholders get nothing for the shares that they’ve been holding, such shares get canceled and extinguished with effect from December 16, 2019. Pursuant to such capital reduction and cancellation, the shares of the company held in the demat account will be debited. Here’s a notice shared by the company in this regards:
So yeah, you’ve lost your investments made. When a company is liquidated, equity share holders are the last set of people to be paid out, if there isn’t enough money left to pay, then the investment is a loss.
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