UPDATE 1-Boart Longyear shares fall on fear of restructuring
* Boart says still looking at range of options
* Mining services sector slammed by commodity slump
* Shares sink to record low, far cry from A$2.35 bln IPO
* Private equity could come to the rescue - analyst (Recasts with Boart statement, analyst comments)
By Sonali Paul
MELBOURNE, July 16 (Reuters) - Boart Longyear Ltd has hired restructuring advisers but is continuing to weigh a range of options to stay afloat, the world's biggest supplier of drilling services to miners said on Wednesday, sending its shares down 37 percent.
If Boart were to go into administration, it would be the biggest casualty of the mining slump, hit by a sharp drop in spending on exploration and projects as commodity prices have declined and Chinese demand growth has cooled.
"This will be a wake-up call for investors who still think that things are going to rebound very quickly in the mining service space," said Ross MacMillan, a senior analyst at Morningstar.
Boart's shares sank to a record low of A$0.085, valuing the Utah-based company at just A$39 million ($36 million), after the company responded to a Wall Street Journal report saying the company was working with law firm Ashurst and insolvency experts KordaMentha, citing three people familiar with the issue.
Boart said restructuring advisers had been involved in a broad strategic review ever since it began in February.
"Those advisors, along with Goldman Sachs and other advisors, continue to actively assist the company with the range of options that remain under consideration with a number of third parties," the Utah-based company said in a statement to the Australian stock exchange.
KordaMentha executives and a partner and spokesman at Ashurst were not available to comment.
Boart, saddled with $600 million in debt and half its drill rigs idle, has been working with Goldman Sachs to sell assets or raise capital since February.
The company reported a net loss of $620 million in 2013, partly due to big writedowns. It warned last week that conditions "remain weak and challenging" and results for the first half of 2014 could be much lower than analysts expect.
Morningstar's MacMillan said the most likely fate for Boart would be a buyout by a private equity firm, taking it back to where it came from. Boart was sold by private equity firms Advent International and Bain Capital and Australia's Macquarie Bank in a A$2.35 billion IPO in 2007.
Other mining contractors and engineering and construction firms have suffered badly as miners have slashed costs and cut projects, in some cases eliminating contractors, as global giant BHP Billiton did at its iron ore operations.
Engineering company Forge Group collapsed in February when its financier, Australia and New Zealand Banking Group, withdrew support.
($1 = 1.0711 Australian dollars) (Additional reporting by Byron Kaye; Editing by Matt Driskill)