Investors eye Tinkler stake in Whitehaven
Coal baron Nathan Tinkler is set for a crash landing as his main financial backer moves closer to a sale of the former billionaire's stake in Whitehaven Coal, sources say.
The sources told Reuters that China's Shenhua Group Corp and an unidentified Japanese firm have approached Noonday, the asset arm of US hedge fund manager Farallon Capital Management LLC, about buying Mr Tinkler's one-fifth stake in Whitehaven, worth about $690 million.
A spokesman for Mr Tinkler on the Whitehaven issue declined to comment when contacted.
A consortium led by Noonday, which includes Credit Suisse, extended $600 million in loans to Mr Tinkler pledged against his stake, which has slumped in value from $1.1 billion at its peak after demand for coal from China weakened.
The loss of the Whitehaven stake, which represents the bulk of Mr Tinkler's wealth, would leave the former mine pit electrician with private shelf companies that have no major assets.
It would also be an embarrassing reversal from just a few months ago when Mr Tinkler tried, but failed, to use his voting power to oust most of the Whitehaven board, claiming mismanagement. Mr Tinkler attempted the board spill after dropping a $5.5 billion bid in August to take the company private.
Mr Tinkler, who turns 37 on February 1, has already lost the title of Australia's youngest billionaire almost as quickly as he got it, shedding some $2 million of paper value per day last year.
His sports and horse racing businesses are in trouble, as are his private jet and helicopter, and he faces lawsuits from the Australian Tax Office and private creditors over unpaid debts and disputed share deals totalling at least $50 million.
Noonday could have acted earlier, which would have hit Mr Tinkler hard, but the firm is protecting its reputation for not destroying its counterparties, a Reuters source with direct knowledge of the Whitehaven issue said.
Another source familiar with Mr Tinkler's financial situation said Noonday had no choice but to sell the 19.4 per cent stake in Whitehaven, Australia's biggest independent miner.
Separate sources ruled out Idemitsu Kosan Co Ltd or Itochu Corp, which has a 10 per cent stake in Whitehaven's key Maules Creek project, as the prospective but so far unidentified Japanese buyer partnering Shenshu.
Mr Tinkler, who moved with his family to Singapore last year, turned a $1 million bet on an unfancied coal deposit in 2006 into a billion-dollar fortune in just two years.
The $5 billion merger of Mr Tinkler's companies Aston Resources and Boardwalk Resources with Whitehaven in April 2012 crowned a rise built on Australian's once-in-a-century mining boom.
But cracks began to appear in his mining, sports and horse-racing empire in the second half of 2012 as coal prices began a downward spiral, appearing to confirm views by critics that Mr Tinkler had borrowed too much, too fast.
The embattled entrepreneur has successfully paid off debts worth millions of dollars in recent months to stave off some creditors and avoid public scrutiny of his finances through the courts, including an Irish race horse stud owned by Sheikh Mohammed bin Rashid al-Maktoum, the ruler of Dubai.
But other major creditors, including the Australian Tax Office, are continuing with a handful of cases against some of his web of more than 40 companies. Mr Tinkler is expected to give evidence in at least one hearing next month.
Rubbing salt into the wound, his former close friend and business associate Matthew Higgins is suing Mr Tinkler for royalties over the coal tenement deal that made his fortune.
Mr Tinkler's Patinack Farm, until recently Australia's largest horse racing business, has shrunk just five years after he splurged $18.5 million on a record 58 horses in a single week.
Almost 400 horses have been sold, including prize stallion "All Too Hard".
His Hunter Sports Group, home to the Newcastle Knights rugby league club and the Newcastle Jets A-League soccer team, has until January 21 to provide an independent audit of the Knights' books to an industry board after delayed payments.
The once high-flying Tinkler is also scrambling to find funds to refinance an $11.4 million debt on his private jet and helicopter before receivers assigned to his private company TGHA Aviation sell them off to repay creditors.