Hanlong’s Takeover Bid of Sundance Slapped with Financing Setback

A year after it was announced that China's Sichuan Hanlong Group's has acquired Australia's Sundance Resources Ltd, the deal has yet to be sealed with the needed financing and skeptics are beginning to doubt if it will ever push through. 

In a stock exchange filing submitted late on Monday, the Australian iron-ore miner said Hanlong, which should have sent finance confirmation letter on Monday, had faced a delay in securing from the China Development Bank a financial commitment to bankroll its $1.4 billion takeover.

Holidays in China, the Mid-Autumn Festival holiday, and agreements on conditions for the financing had delayed the process, Sundance said in a statement, which had been subsequently moved to "the middle of October."

On Monday evening, Sundance had requested that its shares be suspended from trading as it enters with Hanlong into a "five-business-day good faith consultation period, which will commence this week."

In August, the Australian iron ore mining company accepted a revised 45 Australian cents a share bid from Hanlong, a 12 Australian cents drop from the 57 Australian cents it originally offered in 2011, spurred by weak iron-ore prices.

At stake in Hanlong's takeover bid is the $4.7 billion Mbalam iron ore project located in western Africa on the border of the republics of Congo and Cameroon. Seen to produce 35 million tonnes of iron ore annually, the Mbalam project includes a 510 km (320 mile) rail line and a deep water port.

To contact the editor, e-mail: