Centerbridge leads $352m restructuring of Australia-listed miner
Centerbridge Partners will support a $352 million restructuring plan for Boart Longyear, an Australia Securities Exchange-listed mining services provider that has struggled as falling commodities prices prompt a scaling back in exploration.
The restructuring package comprises a new $225 million in covenant-lite term loans that will replace existing debt with tighter lending conditions, reducing the risk of default, and an equity injection of $119-127 million, including a fully-underwritten rights offer worth up to $84 million in which shareholders can participate.
It is estimated these measures will boost total liquidity by $240 million and reduce debt by approximately $120 million.
The new loans, plus an initial equity placement of $5.6 million to Centerbridge, can be launched or completed immediately. The rights offer requires shareholder approval, as do plans to make a follow-on equity placement to Centerbridge of $21 million and convert into equity $16 million in senior unsecured notes held by the firm. Centerbridge is already Boart Longyear's largest shareholder with a 19.9% stake.
"We anticipate the recapitalization will provide the company with significant liquidity to better weather the challenges of the current depressed markets for our drilling services and products and the financial strength to allow more time for those markets to recover," Richard O'Brien, president and CEO of Boart Longyear, said in a statement.
The company posted a net loss of $142.8 million for the first half of 2014. This followed losses of $290.5 million and $329.4 million in the previous two six-month periods. In the first half of 2012, net profit came to $97.7 million while revenues reached $1.01 billion. Revenues were $421.5 million for the first six months of 2014. Net debt was $555.8 million at the end of the period.
US-based Centerbridge, which has $20 billion in assets under management, previously participated in a refinancing of struggling Australian surf-wear company Billabong International alongside Oaktree Capital Management.
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