Bradken is in deep strife as the mining downturn worsens. Its share price has tumbled but managing director Brian Hodges says he doesn't want to cut much harder because the basics of the business need to be preserved. Photo: Liam Driver

The share price of battling mining services firm Bradken has tumbled to less than 50¢ from $3.85 a year ago, but managing director Brian Hodges says while costs are being cut hard he's also trying to protect the basics of the business.

Mr Hodges was speaking to Fairfax Media from the United States, where he is overseeing another round of cost-cutting. But he said he was conscious that slicing into the business too hard after heavy cost reductions already would make it difficult to derive any benefit when the mining cycle eventually began to pick up again.

"We're trying to protect the capability of the business for the long term," he said.

He said he would rather not comment on how far the Bradken share price had fallen, but pointed out that shareholders in the company understood the firm was in a cyclical business and there was "pent-up value" inside the company.

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"They understand the company is going through a cycle."

The speed of the fall in the Bradken share price over the past few weeks has led to renewed speculation of a potential new buyout proposal from CHAMP Private Equity. Bradken shares were at $1.25 in late August. The Australian Financial Review's Street Talk column outlined on Wednesday that CHAMP was working on a new proposal.

CHAMP and Chile's Sigdo Koppers jointly injected $70 million into the weak Bradken balance sheet in late June, 2015, and had a 60-day exclusivity period to try to hammer out a merger deal with Bradken. But the merger talks were officially called off by Bradken at the start of September, with the Bradken board refusing to grant a request to extend the 60-day period.

Mr Hodges said on Wednesday there had been no resumption of talks between the parties, and declined to speculate on whether the slump in the share price would make it more likely a fresh proposal might be made.

He said he was getting on with the business of running Bradken and making it as lean as possible, but still capable of benefiting from an upturn in capital spending in the industry, although he acknowledged that was some way off.

"I'm making sure the restructure of the US business is being done quickly and smoothly."

New York activist hedge fund Litespeed Management is also likely to play a key role in the future of Bradken. It has amassed a stake of 12.94 per cent in the company, but at the current share price is heavily underwater in its investment.

Bradken has a new chairman in Phil Arnall, who took over from Nick Greiner at the Bradken annual meeting in early November. Two other directors resigned on November 6.

Mr Greiner, the NSW Premier from 1988 to 1992, had been in an uncomfortable position because he had dual roles at CHAMP and Bradken. He is deputy chairman of CHAMP, and while he was still at Bradken removed himself from discussions on the merger proposal by appointing a three-person independent committee from Bradken.

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