The company has formally mandated seven of its existing banks to act as joint mandated lead arrangers and book runners to refinance and extend its existing credit facilities in a reduced amount.

The banks are Bank of America, National Australia Bank, Royal Bank of Scotland, BNP Paribas, Commonwealth Bank of Australia, HSBC and ANZ.

The financial institutions have agreed to the terms of a refinancing and extension which includes a reduced facility amount, extended tenure, increased pricing and amended financial covenants.

Boart said the execution of the mandate established an agreed refinancing framework but completion would depend on a number of conditions being met, including the sale of equity securities and/or junior debt obligations and credit approval from each bank.

The company said given the risks, refinancing could not be guaranteed but it remained the goal before the end of 2009.

Boart added that it was confident it was in full compliance with all the June 30 financial covenants under existing facilities.

The company has previously said that $US585 million of the debt is set to mature in April 2010.

Boart shares are down half a cent this morning to 25c after closing down half a cent on Friday.