Boart Longyear rubs out 90% of debt with raised capital

A successful $770 million capital raising will allow drilling services provider Boart Longyear to cut its debts by around 90%.

Boart Longyear yesterday completed a capital raising program worth US$700 million ($770 million), which the company said would go towards repaying around 90% of its debts.

According to the company, its US$585 million ($650 million) term loan A has now been repaid in full.

“The balance of the net proceeds is expected to be used to reduce outstanding amounts under the company’s revolving credit facility,” the drilling services provider said in a statement.

According to Boart’s chief executive Craig Kipp, the program has reduced the company’s net debt to less than US$100 million ($110 million).

“With a stronger balance sheet, the company is now well positioned to take full advantage of the opportunities created by the recovery in the resources cycle,” he said.

The company’s credit facilities will mature in April 2012.

Boart expects to record approximately US$17 million ($19 million) in pre-tax one-time, primarily non-cash expenses in the second half of 2009 related to the capital raising, the early retirement of debt and certain floating-to-fixed interest rate obligations.

The capital raising followed the completion of a share purchase program (SPP), which resulted in over 10,000 applications to purchase additional shares.

The company issued 308.9 million new ordinary shares at 27 cents per share under the SPP.

Boart had elected to limit the total size of the program to around US$75 million ($82 million), but the additional applications tool the aggregate to around US$118 million ($130 million).

All shareholders who submitted valid SPP applications have been allocated approximately 65% of their application amount, the company said.

Refunds will be made on or about 4 November 2009.

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