I got a company warrant. How do I exercise the warrants to covert it to shares? (Note: company warrant is not structured warrants)
There is way too much information to be contained in this FAQ.
Please refer to this site
for more information on the exercising of company warrants.
What are rights warrants?
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In addition to issue rights shares, a company may instead choose to issue rights warrants. Somewhat similar to right shares, rights warrants give the shareholders an opportunity to subscribe to rights that will be converted to company warrants upon ceasing of nil-paid rights trading. These company warrants give the holders the right to convert the warrants to ordinary shares at some point in the future (before the expiry of the warrants) by exercising them.
This is quite different from rights shares. Subscription to rights shares and subsequent ceasing of nil-paid rights converts the rights to ordinary shares immediately, whereas rights warrants are converted to company warrants (so you can choose when to convert to ordinary shares anytime before expiry of the warrants). The benefits of the warrants is thus this – you can save capital that would be otherwise locked up as warrants are leveraged derivatives, so the locked up capital is a fraction of that of ordinary shares. If the company is doing well, the price of the warrants will rise and you might choose to sell it without exercising it. Or if you believe in the long term prospects of the company, you can choose to exercise your warrants by converting it to ordinary shares.
Paul mentioned that there are some warrants that can only be converted on a specified date, an example of which is TechOil@GaeW101126. As always, it's better to check the OIS that comes together with the rights issue for more information that might not be applicable for others.
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