Hanlong gets nod for Sundance bid
Source: Agencies |
August 2, 2012, Thursday
|
Print Edition
Print Edition
HANLONG Mining yesterday said China has approved its long-delayed US$1.3 billion takeover bid for Australian iron ore developer Sundance Resources, a vote of confidence for a sector grappling with falling prices and weak demand as the global economy cools.
Hanlong, which already owns 17 percent of Sundance, wants the company for its US$4.7 billion Mbalam iron ore project on the border of the republics of Congo and Cameroon in western Africa. The region is seen as a major new source of iron ore that could cut China's dependence on Australia and Brazil.
"We have gotten approval from the National Development and Reform Commission. It was approved on Monday," a Hanlong media officer said yesterday.
With the approval from the top economic planner, Hanlong now needs finance from China Development Bank to complete the deal that was agreed a year ago, when the iron ore price outlook was far more positive.
Australia's Foreign Investment Review Board approved Hanlong's bid for Sundance in June.
The deal's lengthy delays pointed to China's reluctance to make big bets on risky resources projects offshore amid uncertainty over economic growth at home.
Iron ore prices are languishing near their lowest level in more than two and a half years, hitting the share prices of resource firms.
Hanlong is now seeking to negotiate a lower price for its bid for Sundance, a separate Hanlong official said, now that its share price has fallen over 40 percent from the agreed prices of 57 Australian cents (60 US cents) per share, which valued the company at A$1.74 billion.
Sundance shares last traded at 33.50 Australian cents, before the stock was placed on a trading halt on Tuesday.
Under the agreement, Hanlong must secure China Development Bank's blessings by August 31 to buy the shares it does not already own.
Hanlong, which already owns 17 percent of Sundance, wants the company for its US$4.7 billion Mbalam iron ore project on the border of the republics of Congo and Cameroon in western Africa. The region is seen as a major new source of iron ore that could cut China's dependence on Australia and Brazil.
"We have gotten approval from the National Development and Reform Commission. It was approved on Monday," a Hanlong media officer said yesterday.
With the approval from the top economic planner, Hanlong now needs finance from China Development Bank to complete the deal that was agreed a year ago, when the iron ore price outlook was far more positive.
Australia's Foreign Investment Review Board approved Hanlong's bid for Sundance in June.
The deal's lengthy delays pointed to China's reluctance to make big bets on risky resources projects offshore amid uncertainty over economic growth at home.
Iron ore prices are languishing near their lowest level in more than two and a half years, hitting the share prices of resource firms.
Hanlong is now seeking to negotiate a lower price for its bid for Sundance, a separate Hanlong official said, now that its share price has fallen over 40 percent from the agreed prices of 57 Australian cents (60 US cents) per share, which valued the company at A$1.74 billion.
Sundance shares last traded at 33.50 Australian cents, before the stock was placed on a trading halt on Tuesday.
Under the agreement, Hanlong must secure China Development Bank's blessings by August 31 to buy the shares it does not already own.
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