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    Some progress in Hanlong bid for Sundance

    Date February 7, 2013 - 6:33PM

    Philip Wen

    Journalist, BusinessDay

    There could yet be life in Sichuan Hanlong’s drawn-out $1.4 billion takeover bid for Australian iron ore play Sundance Resources.

    China’s all-powerful National Development and Reform Commission has extended its provisional approval for the privately-owned Hanlong to proceed by six months, on the condition it teams up with a larger Chinese partner with ‘‘sufficient capability’’ to develop Sundance’s Mbalam project on the Cameroon border with Congo.

    In a welcome bit of clarity for shareholders frustrated at the lack of timely information throughout the takeover process – which has dragged on for more than 18 months – Sundance Resources said in a statement to the stock exchange late today that Hanlong must secure the agreement with a large Chinese partner in order for the state-run China Development Bank to commit to funding the takeover.

    Hanlong is confident that discussions are advanced enough for a partnership – understood to be with a state-owned enterprise – to be clinched in time for a March 26 deadline. But the group has missed similar deadlines before, including one just last week.

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    Under the latest iteration of the takeover scheme timetable, the deal is slated to conclude in May.

    But on top of the time required for Hanlong to confirm a deal with a Chinese partner, the deal will also need regulatory approvals from China’s Ministry of Commerce and State Administration of Foreign Exchange, as well as a final tick off from the NDRC.

    Shares in Sundance Resources are in a trading halt, last trading at 34¢, a significant discount to the 45¢ offer price.

    Sundance investors have been frustrated by the takeover process, which saw Hanlong drop its takeover offer mid-way after commodity prices fell sharply last year.

    Hanlong has since struggled to secure funding from the CDB, despite the bank's prominent role in financing Chinese investments in Africa


    Read more: http://www.theage.com.au/business/mining-and-resources/some-progress-in-hanlong-bid-for-sundance-20130207-2e16j.html#ixzz2KDTVONul
 
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