Reuters logo
UPDATE 1-Sundance CEO not confident on Hanlong bid after chairman detained
March 20, 2013 / 7:32 AM / 5 years ago

UPDATE 1-Sundance CEO not confident on Hanlong bid after chairman detained

* Sundance CEO says expects Hanlong to struggle with bid deadline

* Sundance shares on trading halt 53 pct below offer price

* Sundance seeks share suspension until April 8

* Sundance CEO says still in talks with other potential partners (Adds detail on talks with other potential partners, Hanlong comment, background)

HONG KONG, March 20 (Reuters) - Australia’s Sundance Resources Ltd said it is not confident suitor Hanlong Mining will meet a deadline to prove financing for its $1.4 billion takeover bid after the apparent detention of the Chinese company’s chairman.

Sundance has threatened to walk away from the long-delayed deal if Hanlong misses any further milestones and is in talks with other potential partners to develop its roughly $5 billion Mbalam iron ore project on the border of Cameroon and the Republic of Congo.

China’s official Shanghai Securities News on Wednesday reported Hanlong chairman Liu Han and some family members had been detained by authorities but gave no details for the reason.

“We understand he’s been detained,” Sundance Chief Executive Giulio Casello told Reuters by telephone.

“I don’t know what it is for. We don’t think his detention has anything to do with Hanlong as a company.”

Liu and his ex-wife, who is also his current business partner, were detained after visiting Beijing on a business trip during China’s National People’s Congress, the Shanghai Securities News reported.

“Currently there are no police, nor anyone who has officially informed us of anything. Even we are not clear about all these things,” a Hanlong media officer said.

Casello said he was not confident Hanlong would be able to meet the March 26 deadline for providing a credit-approved term sheet backing its offer. Hanlong had been talking to Chinese steel mills about partnering in the project.

“We think they’re going to struggle with the timing based on what our understanding is,” Casello said.

The board would make a decision on what their next step would be, based on Hanlong’s reason if it failed to meet the deadline, he added.

Casello said the company remained in confidential talks about alternatives to develop Mbalam if the Hanlong deal falls through, declining to identify potential partners.

The Australian Financial Review on Tuesday reported that a backup plan for Sundance could involve commodities trading giant Glencore International. Glencore has not commented on the report.

Sundance shares were halted on Tuesday at the request of the company. They last traded at less than half the offer at A$0.21, having fallen 30 percent so far this month.

In a statement on Wednesday to the Australian Stock Exchange requesting a suspension of its shares until April 8, Sundance said Hanlong had not sought to lower the price it was offering for the company.

Hanlong launched its offer for Sundance in October 2011 but last year cut its offer price by more than a fifth to A$0.45 per share after Chinese regulators raised concerns about the cost following a slide in iron ore prices. China had wanted to develop its own iron ore mines to help break the grip of mega miners Vale, Rio Tinto and BHP Billiton . (Reporting by Sonali Paul; Additional reporting by Xu Wan in BEIJING; Editing by Ken Wills)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below