Aug. 17 (Bloomberg) -- Boart Longyear Ltd., a provider of drilling services to mining companies, plans to sell $635 million of shares to cut debt after turning to loss in the first half as sales dropped. The share sale, due to be complete by the end of September, will reduce net debt by 78 percent from June 30 levels. Boart turned to a loss of $5.4 million, or 36 cents a share, in the six months ended June 30, from profit a year earlier of $111.7 million, or 7.43 cents, the company said today in a statement. Boart, which has been reducing staff amid a slowdown in demand for its services, in May said it would cut capital spending 74 percent this year. The Adelaide and Salt Lake City- based company doesn’t expect a “significant pickup” in orders until the end of 2009 before a gradual recovery next year. “The debt was always something that had to be attended to,” said Jamie Spiteri, head dealer at Shaw Stockbroking Ltd. in Sydney. “An appreciating share price recently gave it ability to recapitalize.” Boart’s stock, in a trading halt until Aug. 20, rose to a nine-month high on Aug. 14, its last trading day. After reaching a record high of A$2.186 on Oct. 29, 2007, the stock went into freefall in the second half of 2008 as the global financial crisis cut demand for its services, with Boart finishing the year down 91 percent. The shares have rallied 120 percent in 2009. Exploration Spending Boart will sell the new stock at 27 Australian cents a piece, it said in a separate presentation, compared with the last traded price of 35.5 Australian cents on Aug. 14. The stock will be sold in three groups and the sale is fully underwritten by Goldman Sachs JBWere Pty, Macquarie Capital Advisers Ltd., Merrill Lynch International (Australia) Ltd. and RBS Equity Capital Markets (Australia) Ltd., it said. “Current commodity prices -- gold, copper and iron ore -- if maintained, are above the levels required to justify increased drilling activity,” Boart said. “This, together with increasing resource sector capital raisings should support additional exploration spending.” Boart said it expects the drop in revenue in 2009 will “approach” 50 percent, compared with record growth in 2008. Sales may expand 15 percent in 2010 “assuming continued global economic recovery, no significant declines in commodity prices and continued improvement in the financing markets,” it said. To contact the reporter on this story: Madelene Pearson in Melbourne on mpearson1@bloomberg.net; Jason Scott in Perth at Jscott14@bloomberg.net

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