- Agreement overwhelmingly supported by Boart Longyear shareholders
- Boart Longyear enters its 125th year as a financially stronger company
Boart Longyear Limited (ASX: BLY), a leading global supplier of drilling services, drilling equipment and performance tooling, announced today that it has successfully completed a comprehensive recapitalization plan it previously agreed to with private equity firm Centerbridge Partners, L.P.
The recapitalization transactions which were overwhelmingly supported by Boart Longyear’s shareholders in December 2014, strengthen the Company’s balance sheet, provide greater liquidity and improve the Company’s financial flexibility to support current operations and long-term growth.
“The successful recapitalization transactions enhance our ability to serve our global customer base and drive shareholder value,” said Richard O’Brien, President and Chief Executive Officer of Boart Longyear. “We are particularly excited to partner with Centerbridge, a highly regarded private equity firm with a strong track record of investing and partnering with companies in a wide range of industries.”
The recapitalization transactions were the outcome of a strategic review process initiated by the Company in February 2014. Highlights include:
- US$225 million in new loan financing provided by Centerbridge – Proceeds have been used to refinance the Company’s existing revolving credit facility and repurchase existing 10% Senior Secured Notes. The new financing package has eliminated strict covenants associated with the existing revolving credit facility, along with other advantages.
- Approximately US$111 million in new equity capital – New capital was raised through two private placements to Centerbridge totalling approximately US$27 million and an equal-access rights offering which totalled approximately $US84 million.
- US$16 million Debt Equitization – Centerbridge also agreed to convert its US$16 million holding of Boart Longyear issued debt into US$16 million of equity.
- Equity-funded Share Repurchase Plan – The Company also sold Centerbridge approximately 8 million fully paid ordinary shares it acquired in an off-market share buyback launched in December.
- Centerbridge Ownership in Boart Lonygear – As a result of the recapitalization transactions, Centerbridge now owns approximately 465 million common shares and 434 million preferred shares.
- Centerbridge nominee joins Boart Longyear Board – Conor S. Tochilin, who joined Centerbridge as a Principal in 2013, was appointed as a Director. Centerbridge also continues to review other candidates to nominate for further appointments to the Board, as appropriate.
“This is an important step forward for our Company, and we appreciate Centerbridge’s commitment of new equity capital and financing to help us achieve our strategic goals,” O Brien added. “This agreement reflects Centerbridge’s confidence in our management team, business model and future growth prospects, and further demonstrates that the Boart Longyear franchise, which celebrates its 125th anniversary this year, is fundamentally strong and valuable.
“Our Board, management team and Centerbridge believe this recapitalization will benefit the Company’s shareholders, customers, employees, creditors and other key stakeholders by improving our ability to both weather the current cyclical downturn and invest strategically for the future.”
About Boart Longyear
Celebrating its 125th anniversary in 2015, Boart Longyear is the world’s leading provider of drilling services, drilling equipment, and performance tooling for mining and drilling companies globally. It also has a substantial presence in aftermarket parts and service, energy, mine de-watering, oil sands exploration, and production drilling.
The Global Drilling Services division operates in 30 countries for a diverse mining customer base spanning a wide range of commodities, including copper, gold, nickel, zinc, uranium, and other metals and minerals. The Global Products division designs, manufactures and sells drilling equipment, performance tooling, and aftermarket parts and services to customers in over 100 countries.
Boart Longyear is headquartered in Salt Lake City, Utah, USA, and listed on the Australian Securities Exchange in Sydney, Australia. More information about Boart Longyear can be found at www.boartlongyear.com. To get Boart Longyear news direct, visit http://www.boartlongyear.com/rssfeed.