'Detention' puts hold on General Moly loan
US firm seeks to clarify report that chairman of Sichuan Hanlong is in Chinese custody
General Moly, owner of the largest rare-earths deposit in the US, suspended work on a US$665 million loan after a report that the chairman of the Chinese company arranging the credit has been detained in China.
The company is seeking clarification from Sichuan Hanlong Group about the reported detention of Liu Han, Colorado-based General Moly said in a statement. The stock fell 14 per cent to US$2.37 on Wednesday in after-hours trading in New York.
General Moly joins Australia's Sundance Resources, subject of a A$1.14 billion (HK$9.18 billion) takeover by Hanlong, in seeking information on Liu's status. Liu and his ex-wife were detained after attending the National People's Congress in Beijing this month, according to a report by the Shanghai Securities News, which cited unidentified people familiar with the matter.
"It has obviously put the takeover deal under pressure," Evan Lucas, a market strategist at IG Markets, said.
Sundance chairman George Jones said he would have a meeting yesterday with Hanlong's "senior people" in Perth. The meeting would not include Liu, who was "uncontactable", Jones said.
Sichuan Jinlu Group, a chemical company, was not able to get in touch by telephone with Liu, also its chairman, according to a statement late Wednesday from the company to the Shenzhen Stock Exchange.