Boart Longyear Obtained A Waiver From Listing Rule Driven By Novation Of Loans

  • Jan 02, 2019 AEDT
  • Team Kalkine
Boart Longyear Obtained A Waiver From Listing Rule Driven By Novation Of Loans

On 2 January 2019, the company announced that it has obtained a waiver from Listing Rule 10.1. A strategic review by the company in 2014, involved in assessing the potential options of maximizing shareholders value and help the company to achieve a more sustainable capital structure. The company after exploring numerous options for recapitalization and restructuring finally announced to have entered into agreements with Centerbridge Partners for re-capitalization transaction as on October 23, 2014.

The transaction includes Centerbridge to provide loans with fewer restrictions on collaterals which and will accumulate interest to refinance its existing cash pay covenant laden revolving credit facility and buy back some of its existing secured loans.  

The company recently proposed to move the restructured term loans to the US, as a part of the internal debt reorganization. This will be done by the replacement of loans to a new US subsidiary of BLY rather than continuing with the existing loans. The terms and conditions of the replaced loans will be the same as those of the previously negotiated and agreed under the restructured term loans. There is no provision for any additional funding in the new loan contracts. As a result of consequence of the novation of the loans, the company obtained the waiver. The waiver will facilitate the company and its subsidiaries in providing security to Centerbridge in respect to the novated term loans.

The company suggested that it expects to repay the term loans as per the schedules and maturity dates of those loans.

In 1HFY18, topline of the company came in at $394 Mn, signifying 11% growth on Y-o-Y basis. It was mainly driven by volume growth across drilling services and products from the previous corresponding period H1 2017. Adjusted EBITDA stood at $37 Mn in 1HFY18, an increase of 71% (yoy) driven by increased volumes, reduction in selling general and administrative overheads, and improvement from ongoing productivity initiatives. Adjusted Net Loss After Tax grew by 81% to $10 Mn in 1HFY18. The rating by the agencies including Moody’s and S&P has upgraded the outlook of the company to stable from negative.

BLY’ shares traded at $0.004 with a market capitalization of $105.18 million on January 02, 2019. The company posted a negative YTD return of 63.64% and produced a negative return of 60.00% over the last six months period, with a 52-week high price of $0.015 and a 52-week low price of $0.002. It is currently trading at PE multiple of 0.040x with an EPS of AUD 0.096.


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