Yes, that could happen. But even if it doesn't Linc's shareholders are looking at a seriously diluted asset base (the Company is making no secret of the fact they're looking to sell the ARK, Umiat, the US oils and gas assets and whatever else they have left) and a seriously expanding share register (1.6b convertible notes converted to stock). This is not a good position to be in.
For a simple demonstration of the problems compare the situation now to 2012/13. Then (12/13), the Company had a market cap of A$1.2b, which translated to nearly A$3 per share (and the Company used the high valuation to load up on debt and issued the convertibles). If you'd bought 1 share and not yet sold it then through dilution the same market cap now would see the stock worth only A$2. Worse still, if the amendments are passed for the Convertible Notes and the Note Holders convert to stock (in full) the same A$1.2b market cap will see the stock worth only A$0.50. In this case the Company could be valued by the market as exactly the same as three years ago and you would still lose 85% of your capital.
So yes, administration is one option. My point has been for a long time though that the Company does not have to die for you to lose a very significant portion of your "investment" which you will not get back unless the market cap of the Company can defy financial gravity and be worth 6 times what it was when our hypothetical investor purchased their stock despite now having no cash in the bank and debts on the sheet.
Clearly they market cap is much lower now then it was in 12/13. Unfortunately the same rules still apply to the effect of the Notes but the end result is a much, much lower price than A$.50...
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