A mining company that has operated for over 100 years is in a rough patch, but a new deal may help it pay down its massive debt.

Troubled mining company Boart Longyear will be bailed-out by US private equity firm and debt financer, Centerbridge Partners.

The $401 million will see debt assistance for Boart in exchange for an increased stake in the company for Centerbridge.

The deal includes $256 million in new loans and up to $145 million in new equity.

In an update early this year, Boart said held over $600 million in debt and needed to hire restructuring advisers to avoid insolvency.

Boart Longyear has been in business for 124 years, but weak demand in the last two years mean its key customers are less interested in further expansion and exploration.

The company has sacked thousands of workers since 2012, while its net debt increases by nearly $100 million.

Company shares surged after the announcement of the bail-out deal, with Centerbridge Partners agreeing to increase its stake to 37 per cent from the current 12.7 per cent.

Boart Longyear will buy back of up to $119 million of senior secured notes.