Boart launches $103m raising
Shareholders in Boart Longyear were yesterday given the opportunity to take part in the troubled drilling contractor's life-saving recapitalisation, with the launch of a $103.1 million rights issue.
The rights issue, priced at 16.5� a share, will almost double Boart's issued capital.
It is underwritten by private equity group Centerbridge Partners, which has refinanced much of Boart's debt and could end up with a controlling equity stake if the driller's shareholders shun the 0.9798-for-one renounceable rights issue.
Boart shares closed up 1� at 16.5� yesterday as the rights issue documents were sent to investors.
The Boart rights will start trading on the Australian Securities Exchange today until the offer closes on January 19.
The refinancing will bring to an end a torturous process undertaken by Boart chief executive Richard O'Brien, the former Newmont Mining boss, to deal with a suffocating debt burden at a time when customers are cutting back on exploration and development drilling work. Boart's net debt is about $US500 million ($614 million).
Mr O'Brien told shareholders this month that Boart should be able to deliver full-year revenue this calendar year "at the strong end of the range of analyst estimates", which were as high as $US852 million.
But he warned that further erosion in pricing, higher rig maintenance and mobilisation costs and currency movements meant earnings before interest, tax, depreciation and amortisation for the year were likely to be $US30 million, compared with an analysts' range of $US34 million to $US48 million.
