Boart Longyear Limited
(ASX:BLY) has flagged continued weak earnings, with demand for its mining sector services dropping amid ongoing pricing pressure.
The drilling contractor says it can rebuild operations without turning to shareholders for funds after completing a $300 million financing earlier this week that carries a 10 per cent interest rate.
Boart Longyear has already downsized its workforce - 3000 jobs were cut last year, another 2000 in the first six months of this year.
Despite management optimism, analysts are warning the loan terms are restrictive since lenders have first-priority security interest over various assets together with placing additional limits over Boart Longyear's ability to raise further debt and over capital spending plans.
Boart told analysts capital spending will be capped at $US50 million a year over the next few years.
Boart Longyear booked a net loss of $355 million in the first half of fiscal 2013.
