Sundance warns of Hanlong deal delay as China bank seeks information

SYDNEY Mon Dec 3, 2012 9:21am IST

Stocks

   

SYDNEY (Reuters) - China's Hanlong Group has sought to extend the timetable to close its long-delayed $1.4 billion takeover of Sundance Resources (SDL.AX), the Australian company said on Monday.

Hanlong has told Sundance it will not be able to deliver key paperwork by December 13 as initially agreed because China Development Bank, which is providing the majority of funding for the deal, has requested further information.

Sundance said it has not agreed to amend the timetable for the deal, which was due to close on January 8, and was seeking more detail from Hanlong.

Sundance was targeted last year by Hanlong for its $4.7 billion Mbalam iron ore project on the border of Cameroon and the Republic of Congo, a new source of iron ore that could help trim China's dependence on the big three iron ore producers, Vale (VALE5.SA), Rio Tinto (RIO.AX) and BHP Billiton (BHP.AX).

The takeover has dragged on amid China Development Bank's reluctance to sign off on a loan for the deal and earlier delays in securing mining agreements with the governments of Cameroon and Congo.

China Development Bank eventually agreed in October to provide a debt facility of up to $1.022 billion, subject to credit approval processes. Hanlong also received a loan commitment from Bank of Deyang Co Ltd for the remainder.

However, Sundance said on Monday that China Development Bank has requested a review of the just signed Cameroon Convention and of the anticipated Congo Mining Permit before it provides the term sheet for the deal.

Sundance shares will remain in a trading halt until the start of the session on Wednesday when it will also provide an update on the timetable, the company said in a statement.

The stock last traded at A$0.39 ($0.41) on Friday. ($1 = 0.9585 Australian dollars)

(Reporting By Jane Wardell; Editing by Muralikumar Anantharaman)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared