The long-running takeover of iron ore stock Sundance Resources faces more delays and uncertainty after Chinese suitor Hanlong Mining was told by regulators and bankers in China to find a large and experienced project partner.
Sundance announced today that the targeted completion date for the takeover has been pushed back to 7 June.
It disclosed that China’s powerful National Development and Reform Commission (NDRC) has granted a six month extension to its provisional approval of Hanlong’s $1.3 billion takeover offer, but has added a major new condition.
“The NDRC has attached a special requirement that Hanlong will enter into an agreement with a Chinese corporation with sufficient capability to undertake the Mbalam-Nabela project with Hanlong,” Sundance said in a statement.
Sundance said it understands that Hanlong must “sufficiently advance” such an agreement before the China Development Bank will provide term sheets for the funding of the takeover.
“Hanlong has also specifically confirmed to Sundance that discussions aimed at securing its large Chinese partners are sufficiently advanced to enable the term sheets to be issued on or before 26 March 2013,” Sundance added.
The Mbalam-Nabela project is located in the neighbouring African countries of Cameroon and Congo and is budgeted to cost US$4.7 billion.
Sundance chairman George Jones said the company welcomed NDRC's ongoing commitment to completing the Hanlong transaction.
"The NDRC has again shown its support for Hanlong's acquisition of Sundance," Mr Jones said in a statement. "By requiring Hanlong to secure a large Chinese partner, the NDRC has also shown China's strong desire to develop the Mbalam-Nabela project.
"Hanlong has advised us that it is in advanced discussions with this prospective partner and is on track to meet the 26 March 2013 deadline for the credit approved term sheets.
"In light of this substantial progress and committment, I am confident that the transaction will be completed in line with the revised timetable for the benefit of all Sundance shareholders."
