MELBOURNE, Aug 17 - Australian drilling services company Boart Longyear Ltd (BLY.AX) plans to raise $635 million by selling new shares at a 39 percent discount to help pay off most of its debt, the company said on Monday.
The U.S.-based company flagged in May it was looking for ways to slash debt in order to avoid breaching its net debt-to-earnings cap under its loan terms, as the slump in global mining activity had hit its earnings.
Boart reported a net loss after tax and before adjustments of $5 million for the six months to June, compared with net profit of $112 million profit a year earlier, but said the outlook for drilling services demand from miners was improving.
The equity raising at 27 cents a share, including an entitlement offer and share placements, will more than double Boart's share base and will be used to repay a $585 million loan, or 78 percent of its net debt.
The company's shares closed last Friday at 44 cents, their highest close in nine months and up nearly six times from their low of 6.7 cents in March.
The offer is fully underwritten by Goldman Sachs JBWere (GS.N), Macquarie Group (MQG.AX), Merrill Lynch (BAC.N) and RBS Australia (RBS.L).
The U.S.-based company flagged in May it was looking for ways to slash debt in order to avoid breaching its net debt-to-earnings cap under its loan terms, as the slump in global mining activity had hit its earnings.
Boart reported a net loss after tax and before adjustments of $5 million for the six months to June, compared with net profit of $112 million profit a year earlier, but said the outlook for drilling services demand from miners was improving.
The equity raising at 27 cents a share, including an entitlement offer and share placements, will more than double Boart's share base and will be used to repay a $585 million loan, or 78 percent of its net debt.
The company's shares closed last Friday at 44 cents, their highest close in nine months and up nearly six times from their low of 6.7 cents in March.
The offer is fully underwritten by Goldman Sachs JBWere (GS.N), Macquarie Group (MQG.AX), Merrill Lynch (BAC.N) and RBS Australia (RBS.L).
