Hi Doc, been thinking about your question because I didn't want give answers and jump to conclusions. But I think most of it has already been cover by other posters.
From my own experience I can draw two examples where debt became an issue (at least for the share prices). One was CNP, it was a market darling until the GFC hit, and all their fundings were short term, and assets in the long term (they owned shopping centers and was the second largest in OZ, first being Westfield) when short term funds dried up they had to fire sell some of their assets worked really hard with the syndicate, but eventually got delisted even though the company assets were strong, at the end of the day, Cash was king... I am not sure what happened to share holders after the delisting, did they lose everything or got some units under the new structure? Couldnt find anything on ASX or google, but will try HC when I get time. I think the syndicate ended up owning the company. Not surprising if they did, as banks have their own property management teams.
Second was Arium, which is more recent, what I learnt that got me jumpy at the time about my investment in SGH was that Arium also had a debt due date in 2017(or 2018 I can't remember), which mean they still had time to look for financing, but chose to do voluntary admin ( note Arium called VA themselves after the bank rejected their attempt to get a hedge fund involved to buy out their debt at a discount without banks having prior knowledge). This was surprising for me because I researched into VA and definition of insolvency but couldn't work out why would a company go into VA long before the debts were due. But I got some answer from a credit risk colleague, saying the board knew they wouldn't be able to repay the debt even if it's due more than a year away. VA was the easy way out, as directors will be fully responsible if get involved in insolvent trading, but can wash their hands clean if a VA is called.
Then if you look at SGH, I can draw some conclusion why SGH is different and why I personally dont think it will get delisted go bust or go into VA.
1. Unlike CNP , banks probably don't have an appetite owning SGH directly, hence if cash flow is now positive, don't see why bank would have want to takeover and own SGH; (also refer my last post why I don't think debt restructure at this stage is unlikely to come from the bank side or SGH side).
2. Arium was in a loss making streak in the past few years, whilst SGH had growing profits in the past 7-8 years. Arium's directors actually destroyed the relationship with the syndicate, whilst SGH seems to be constantly reporting to bank to maintain that trust and transparency.
Just my two cents... Open for discussion.
Warmest regards
Jack
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