Boart Longyear announces recapitalisation

17 August 2009

Boart Longyear is aiming to raise up to US$ 635 million through a fully underwritten equity offer, which it anticipates will provide US$ 585 million after fees and expenses to reduce debt.

Announcing the recapitalisation during the company's first half results presentation, Craig Kipp, CEO, said, "Successful completion of the recapitalisation will allow us to repay all borrowings due in April 2010.

"This will remove any near-term refinancing risk and will result in a capital structure that gives Boart longyear the financial flexibility we need to take full advantage of the recovery in the resources sector."

First half financial results for Boart Longyear saw the company slump to a pre-tax loss of -US$ 8 million, down from a pre-tax profit of US$ 164 million for the same period last year. Revenues for the period fell -53% to US$ 462 million, down from US$ 985 million last year.

Mr Kipp said, "The first half of 2009 represented the most challenging operating environment our industry has experienced in many years.

"Our recent results and near-term outlook however, reflect the positive trends we have seen in relation to our drilling and products businesses."

A statement said the prices of most of the commodity sectors including gold, copper and iron ore, have increased and are now well above levels which support further activity in exploration. Also, there has been an increase in the level of capital raised over the past few months, particularly by smaller exploration companies.

"I am optimistic that this increase is available financing will translate into increased exploration in the coming months" concluded Mr Kipp.
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