MELBOURNE, July 16 Shares in Boart Longyear Ltd plunged 27 percent on Wednesday after the Wall Street Journal reported the world's largest supplier of drilling rigs to miners had begun talks with restructuring advisers.
Boart sought a trading halt on its shares and said it would make an announcement by Friday after its shares slumped to a record low of A$0.095, valuing the Utah-based company at just A$44 million ($41.08 million), a fraction of its worth amid the mining boom seven years ago.
The Wall Street Journal said Boart, saddled with $600 million in debt, was working with law firm Ashurst and insolvency experts KordaMentha, citing three people familiar with the issue.
Boart's spokesman in Australia declined to comment on the media report. KordaMentha executives and Ashurst spokesmen were not immediately available to comment.
Boart had been working with Goldman Sachs looking to sell assets or raise capital since February and as recently as last week denied speculation that it had failed to find ways to refinance its debt and was headed into administration.
"The company notes that such speculation is incorrect and that it continues to engage in the strategic review with a number of third parties on a range of potential proposals," it said on July 9, in response to a query from the Australian stock exchange after its stock fell to A$0.16.
Boart, like other mining services firms, has been hurt by a sharp drop in exploration by junior prospectors and huge cuts in spending by major miners and by falling commodity prices as Chinese demand growth has cooled.
($1 = 1.0711 Australian dollars) (Reporting by Sonali Paul)