Sundance Resources has raised the possibility of terminating its long-running $1.3 billion takeover agreement with China’s Hanlong Mining, while also confirming it is in discussions with other parties.
Trading in Sundance shares was voluntarily suspended today, after Hanlong disclosed it was unlikely to meet the 26 March deadline for delivering credit approved term sheets.
That was because Hanlong has been unable to strike a deal with a “large and experienced” project partner, as required under its agreement with China’s powerful National Development and Reform Commission.
Sundance said it was meeting with senior Hanlong personnel in coming days to clarify its progress on these matters.
It was also seeking to clarify speculation concerning Hanlong chairman Liu Han, after a report in the Shanghai Securities News that he had been detained by authorities in China.
Sundance said that in the absence of an agreed extension, the failure of Hanlong to meet its commitments would trigger a 5-day consultation period followed by a 10-day termination period.
In the past, Sundance has remained upbeat about the ability of Hanlong to complete its takeover offer, despite repeated extensions dragging the transaction out for 20 months.
The 10-day termination period allows Sundance of Hanlong to terminate the agreed takeover scheme.
Sundance said “these matters are anticipated to be resolved in the week ending 5 April 2013”.
It noted that Hanlong has not sought to renegotiate the 45 cents per share takeover price.
That compares with Sundance’s last traded share price of 21 cents, down from a recent peak of 38 cents in January.
Sundance also announced today it “is in incomplete and confidential discussions with other parties and does not comment on those confidential discussions”.
This followed a report in The Wall Street Journal that Sundance was in discussions with Glencore and other groups over the sale of its stake in its flagship iron ore project in Africa.
The Mbalam-Nabela project is located in the neighbouring African countries of Cameroon and Congo and is budgeted to cost US$4.7 billion.