If Hanlong's investment was a surprise to SDL, then you could speculate that their due diligence, before investing $200 million, could have come from one of the parties that are being negotiated with. (Hard to see Hanlong just conversing with Talbot, particularly before DFS and then forking out that sort of money.) If so, then you would expect that we are close to a deal.
Regarding the cap raise, SDL will need to raise its project contribution in one way or another - so, the "dilution" that the scaremongering is about is going to happen anyway. Then is only a question of where and how. We always knew that SDL has to kick in. By cap raising to a broader base, it effectively puts more investors (especially instos - who we need to fuel SP) into the mix. It also keeps the balance of power more to our favour.
So - another way to look at it is that we would benefit from SDL being stronger, cashed up with non JV partner funds, with more flexibility to get the best deal.
We need to raise cap anyway to get the project moving, It may be a very smart move.
SDL Price at posting:
43.5¢ Sentiment: ST Buy Disclosure: Held
