Mining company Boart Longyear's poor financial performance has resulted in a credit rating downgrade.
Standard & Poor's has lowered its corporate credit rating for Boart to 'CCC' from 'CCC+'.
"Boart Longyear's liquidity position continues to erode due to persistently weak performance, which we believe will continue over the next year," S&P said in a statement.
Boart made a net loss of $US620 million in 2013, partly due to the costs of restructuring which included thousands of job cuts.
In May, shareholders delivered a first strike against the struggling company's executive pay regime.
S&P said further restructuring was likely over the next year given the company's capital structure was "unsustainable in the current environment".
A violation of Boart's financial performance covenants over the next year was a "likely event", S&P said.
It could further lower the rating if a default appeared inevitable within six months.
Boart chief executive Richard O'Brien said the downgrade did not affect any of the company's bank covenants.
He said S&P's rating now matches that given by Moody's.
"We recognise that the recent downgrades by the rating agencies may present concerns for our creditors and other company stakeholders," Mr O'Brien said.
The company was committed to addressing those concerns as quickly as possible, by completing a strategic review of recapitalisation options, he said.
Despite lower demand for mineral exploration and drilling services, Boart's underlying franchise remained strong and continued to generate positive cash flow, he said.
Boart Longyear shares gained 1.8 cents, or 20.7 per cent, to 10.5 cents.
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