FinanceMurder claims hit Sundance takeoverSARAH-JANE TASKER,...

Finance
Murder claims hit Sundance takeover
SARAH-JANE TASKER, TAKEOVERS
353 words
25 March 2013
The Australian
AUSTLN
1 - All-round Country
17
English
© 2013 News Limited. All rights reserved.

SUNDANCE Resources is expected to trigger an option tomorrow that allows it to terminate its $1.3 billion deal with China's Hanlong, amid new reports that Hanlong's chairman was detained for helping hide his brother, who is a murder suspect.

The deal was thrown into doubt last week when it was revealed that Hanlong chairman Liu Han had been detained by police in Beijing. Initial reports suggested he was detained for gambling-related offences.

But reports from China at the weekend said the police ministry issued a two-sentence statement on Friday which said Liu was under investigation on charges of harbouring a fugitive and other unspecified ``serious offences''.

It announced the capture of his brother as a ``major murder suspect'' but gave no other details. Mr Liu's younger brother, Liu Yong, is being investigated in relation to a triple homicide in 2009, according to local media reports.

Sundance was in the final stages of finalising the two-year $1.3bn deal that would see Hanlong take over the junior, which owns the $5bn-plus Mbalam iron ore project on the border of Cameroon and the Republic of Congo.

Privately owned Hanlong was meant to secure a credit-approved term sheet from its financiers, China Development Bank and China Everbright Bank, by tomorrow but it indicated to Sundance during talks in Perth last Thursday that it would miss that deadline.

The board of Sundance met on Friday to discuss the latest setback and told the market it anticipated further discussions with Hanlong and the National Development and Reform Commission. A further update is expected tomorrow once the finance deadline is missed.

After extensions of deal deadlines that Hanlong has repeatedly missed, and following the detainment of Liu, it is understood that Sundance is unlikely to agree to another extension to allow the Chinese suitor to finalise its financing.

The deal includes an option that allows either Sundance or Hanlong to terminate the deal five days after tomorrow's deadline is missed, following a ``good faith consultation period''.