Geez, I'm a real tragic staying up so late looking for SDL info. Anyway, here is the latest. Goodnight.
China Development Bank seeks new Sundance bidder PUBLISHED: 0 hour 11 MINUTES AGO | UPDATE: 0 hour 11 MINUTES AGO
Edited by Sarah Thompson and Anthony Macdonald Share Links: email
Sundance Resources shares continued to freefall after suitor Hanlong officially retreated, at one stage touching just 8¢ on Thursday.
But there are some brave souls looking at whether there might be value in the badly beaten stock at these levels.
(At the very least, the battering gives the long hedge funds a chance to average down their investments on the hope another bid surfaces.)
While Sundance is unlikely to receive another 45¢ offer, it’s believed the China Development Bank would still fund the project if another buyer can be found.
One question that has troubled the market is how Hanlong got around Chinese rules that mandate any loan be backed by at least 50 per cent equity to fund its stakes in both Moly Mines and Sundance with 100 per cent debt.
A source said China Development Bank had recently confirmed the rule does not apply to investments made outside the mainland. The Chinese state-owned lender is also understood to have said it has covenants over Hanlong’s loans which allow its stakes in Sundance and Moly to be recalled and handed to any other Chinese bidder, including a fairly standard covenant around key man risk.
With founder Liu Han still in jail and potentially facing stiff penalties for allegedly harbouring his fugitive brother, it is understood the Sichuan branch of the China Development Bank is now actively seeking another buyer.
At the same time, there are concerns among investors that Sundance management and its counsel have not done enough to understand the Chinese approvals process.
Street Talk understands that Sundance is looking to appoint a more M&A-savvy board member to help guide a new transaction in order to restore the faith and get a new deal over the line.
SDL Price at posting:
8.8¢ Sentiment: None Disclosure: Held