Hanlong's $1.4 bn takeover of Sundance faces new delay
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Sundance, targeted for its $4.7 billion Mbalam iron ore project in Africa on the border between Cameroon and the Republic of Congo, late on Wednesday indefinitely postponed a shareholder vote that had been set for Friday on the long-delayed deal.
Sundance said it was seeking clarification from Hanlong on whether China's National Development and Reform Commission had extended its provisional approval for the deal and was awaiting a new timetable for completing the takeover, which had been due to be sealed in February.
Hanlong was due to submit a credit approval from China Development Bank on Thursday ahead of the shareholder vote.
The bid, launched in October 2011, was first held up by mining permit delays in Cameroon and Congo, which have now been secured, and more recently by slow approvals from China.
Privately owned Hanlong, which owns 14 percent of Sundance, last year cut its bid by more than a fifth to 45 cents per share after Chinese regulators questioned the price tag when iron ore prices slumped.
Sundance agreed to the revised price in August, but the takeover has dragged on as China Development Bank has yet to sign off on a $1.02 billion loan for the deal.
Doubts over the fate of the deal have left Sundance's shares languishing 24 percent below the offer price.
Hanlong Group was in talks with Wuhan Iron & Steel Co Ltd , China's fourth-largest steelmaker, and other Chinese state-owned companies to help develop the Mbalam project, Bloomberg reported earlier this month.
A Sichuan-based Chinese banking source told Reuters this week that financing structures would be "very complicated" for a deal involving privately owned Hanlong and any state-owned partners, suggesting the process may take some time. The source was not directly involved in the deal.
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