Ann: Directors appoint Voluntary Administrator-HDX.AX, page-5

I don't think anyone knows what will happen.

We don't know what the situation is.

I get somehow what the situation with the auditors is. The auditor wants to do a certain writedown and management doesn't think it is justified. I can understand that. But in the end you have to take what the auditor wants to put his signature on.

But financially, that is harder. We haven't been informed about what the situation on the ground is the last 7 or so months..

Have they lost contracts?
What are their margins?
Have contracts gone bad, what that may be?
What is the debt convenant they have breached and how far are they removed from that covenant?
Will they have to do a capital raise and for how much?

I assume that if they have to raise capital and if it's a lot, the current equity will be worthless.
And if they just have to raise 5 or 10 million, what will the dilution be?

In case you have never experienced something like this, the company wil stay suspended until one of 2 situations hapen:
- The company will be liquidated when they won't reach an agreement with the debtholders and you may get some money back in excess of the sales price, but pretty unlikely since it will a distressed sale.
- The company will stay suspended for a while, until they have reached an agreement with the debtholders. If we are lucky, the situation is not as bad as it looks and there is some value left. Then there is the option of a capital raise or for some reason or another the company has rectified the situation with the sale of assets or by internal cash generation, but I consider this even less likely.

The problem is, it can take quite a while before there is a resolution.