A survey by restructuring advisers 333 Management Ltd and Turnaround Management Association Australia revealed that investors of distressed debt in Australia were more interested in purchasing loans in smaller firms than from larger ones.The survey showed that mining services companies would be faced with low margins, working capital demands and increased project risks in the next year. Executive Director of 333 Management Ltd Mick Calder said this prompted soured debt buyers to look for opportunities in smaller firms.

"We continue to see incumbent lenders willing to entertain the notion of selling their debt positions. While the large debt trading and loan portfolio sales have been well-publicized and sought after, it's in the mid-cap space that opportunities may arise in fiscal 2014," Calder said.

Calder also said the investors also wanted to buy bad loans from the portfolio of local banks. "There is a more creative sector that's moving down into mid-sized companies to acquire debt positions," he added.