No Khan for CNNC
24 May 2010
A takeover bid for Canada-based Mongolian uranium developer Khan Resources by Chinese company CNNC Overseas Uranium Holdings Ltd has failed to receive the necessary approvals from the Chinese government.
CNNC Overseas Uranium Holdings has informed Toronto-based Khan that its cash offer to acquire all Khan's common shares will be allowed to expire at the scheduled expiry time of 5:00 pm (Toronto time) on 25 May following its failure to obtain regulatory approval. CNNC Overseas Uranium Holdings is a wholly-owned private subsidiary of Chinese state-owned uranium development and nuclear fuel company China National Nuclear Corporation (CNNC).
According to CNNC Overseas Uranium Holdings, it was notified on 21 May by the National Energy Administration, an arm of the Chinese National Development Reform Commission (NDRC), that the offer was not approved. No reasons for the refusal have been given. The offer was conditional upon the receipt of all necessary Chinese governmental and regulatory approvals, including from the NDRC.
Khan's directors had been recommending shareholders to take up the CNNC bid, which followed a hostile takeover bid from Russia's AtomRedMetZoloto (ARMZ). Now the company says it will be carefully considering its options.
Khan is currently embroiled in a Mongolian court case in which it is challenging the legality of the invalidation of its uranium mining licence by Mongolia's Nuclear Energy Agency (NEA). The court case is the latest development in Khan's attempts to develop its Mongolian interests, including the Dornod deposit, which have been subject to suspensions and cancellations of mining and exploration licences by the Mongolian government over recent months. After cancelling Khan's licences in 2009, Mongolia's Nuclear Energy Agency announced the establishment of a joint venture between Mongolian state uranium mining company Monatom and ARMZ to develop Dornod, and ARMZ launched its hostile takeover bid for Khan.
Researched and written
by World Nuclear News