BusinessSundance to seek new Sino partnerPeter Klinger371...

Business
Sundance to seek new Sino partner
Peter Klinger
371 words
23 March 2013
The West Australian
TWAU
Second
1
English
(c) 2013, West Australian Newspapers Limited
Sundance Resources is expected to start seeking approval from Chinese regulators to talk to some of the Middle Kingdom’s biggest state-owned enterprises about partnering in the development of its Mbalam iron ore project.

Sundance would not discuss its intentions last night. However, with the $1.37 billion takeover by Hanlong Mining almost certain to fail, Sundance is understood to have turned its attention to securing a state-owned enterprise either as partner in Mbalam’s development or as takeover suitor.

Hanlong has until Tuesday to present Sundance with a credit- approved term sheet, proof the privately owned Chinese group can fund Sundance’s takeover.

Sources close to Sundance say it is highly unlikely that Hanlong will secure the term sheet, particularly since its billionaire founder Liu Han was arrested by Chinese authorities this week because of alleged money laundering activities.

Mr Liu’s arrest is the latest blow to Hanlong’s crumbling credibility in Chinese financial and government circles, affected by Hanlong’s repeated request for extensions to a takeover timetable agreed with Sundance. Delivering the term sheet to Sundance on Tuesday is a key condition of the agreed takeover. Assuming Hanlong fails to meet the deadline, Sundance is expected to cite a breach in the agreement to end the takeover.

The Sundance board is thought to have met yesterday to discuss the outcome of Thursday’s meeting with Hanlong representatives.

In a statement yesterday, Sundance said it was continuing talks with Hanlong and the National Development and Reform Commission, which signs off on Chinese companies’ overseas investments.

China’s authorities are thought to be keen to participate in Mbalam, a $5 billion iron ore mine, rail and port development straddling Cameroon and the Republic of Congo, because they see it as crucial to opening up African iron ore to China Inc. It is known the NDRC was uncomfortable with Hanlong as Sundance’s partner, with the commission preferring a state-owned enterprise.

Sundance’s board is hopeful the NDRC’s interest in Mbalam remains strong and that a new, more credible partner is found quickly.

Sundance shares remain in suspension, at 21¢, compared with Hanlong’s 45¢ offer price.

West Australian Newspapers Limited