'Servicing its debt' probably needs to be unpacked.
Between now and June 2017 I presume it's only responsible for interest payments. I would agree an inability to meet these obligations = the show is over. No ability to go to market insolvent (or anticipating insolvency) and sell an equity raising. This is purely a function of its cash position, it's maxed out. Should this eventuate, who knows, maybe the banks would on-sell these term loans to other investors and there may be some capacity to restructure into a hybrid product. A distressed debt holding with some equity conversion option. Perhaps wishful thinking but not unheard of depending on investor appetite.
We don't know what the lender's appetite for re-financing will be, nor what position S&G will be in as principal repayments are due.
I think there is some grey area in between it achieving a viable business should this eventuate, and a return to its desired capital structure. If there is a strong suggestion of a viable business (but not yet achieved) there may be some appetite to support an equity raising. There may also be an appetite to re-finance part or all of the debt facility.
SGH Price at posting:
38.5¢ Sentiment: Hold Disclosure: Held