the share price can currently fall further but it isn't(not saying it wont). With the consolidation there is now the ability for the share price to fall and rise in smaller increments. So consolidation wont make the share price fall, but more bad news / no good news will. So lets wait and see.
As far as dilution goes, your not getting diluted if you participate in the rights issue, because your increasing your holding in line with the dilution.
Then if you have the options and participate in that issue then you have just been thrown a potential lifeline because you have a further 3 years for them to dig out of this hole before you convert or let them lapse.
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