Could this Stock go Bankrupt??Absolutely. Debt kills. AOI is saddled with over USD $1 billion in debts with repayment ability questionable just like Tullow Oil due to collapse in oil. The oil market is dead and gone. The energy sector was the worst performer in the last decade. It is at the bottom barrel again in 2020.
AOI sat with over USD$400 million in cash for over 2 years, and finally took the improvident plunge - biting more than it could chew - buying up the discarded Nigerian assets and getting itself into one friggin' deep hole. This is just like Lundin's RB Energy which sat with $50 million cash for more than 2 years and finally invested in a legacy Quebec lithium mine. They couldn't produce nameplate lithium and went belly up due to debts.
it seems to me AOI and other companies in tthe Group are still run by the usual suspects with dismal records since the good old days. Lundin was a great promoter and made his fortune with his management team reaping millions in cheap options. Lukas Lundin's "halo effect" of producing great winners is long gone.
Management is old and stuck in the Stone Age.
i believe AOI will have to take a massive write down based on downgrade in present value reserves under IFRS rule, wiping out most of its equity. That could violate the prevailing loan covenants and drive the Company into CCAA bankruptcy protection (similar to Chaper 11).
iMHO