hanlong - the good and the bad

It will be interesting to see how this Hanlong issue plays out and what sort of impact it will have on SDL. My take on the good and the bad are as follws:


THE GOOD

- It gives SDL more time and incentive to continue negotiations with other JV Partners.

- It gives other potential strategic partners more hope, knowing that Hanlong is not a done deal, giving more chance to the possibility of a JV agreement.

- It takes the wind out of Hanlong's sails, which will affect their negotiating power against Sundance.

- It will serve as a reminder to Hanlong that they must play by the rules, and if they don't there will be consequences.

- It may prompt Hanlong to get moving even faster with an increased bid or fairer agreement, in order to put the incident behind them and to restore their creditability.

- The Chinese Government may step in somehow, either making sure that Hanlong play by the rules in order to stop embarassing China, or even no longer supporting Hanlong, giving preference to other Chinese companies becoming involved with Sundance.


THE BAD

- The investigation could delay negotiations, until they work out the full extent of the crime and exactly who was responsible.

- Having Hanlong as a major share holder, may scare the Cameroon Government or even scare off other potential strategic partners / takeover offers. It may also deter investors from purchasing SDL shares.

- If the Chinese Government are embarassed by Hanlong, and Hanlong remain a major share holder, then the Chinese Government may not support Sundance.


After summing up the good and the bad, I am confident that once the dust settles down, the event will cause things to work out in SDL's favour.