Tinkler Creditors Said to Consider Seeking Whitehaven Stake
Nathan Tinkler’s creditors may seek to take control of his A$560 million ($585 million) stake in Whitehaven Coal Ltd. (WHC) if he fails to make payments on a loan, three people with knowledge of the matter said.
Tinkler owes as much as $700 million to lenders including U.S. investment company Farallon Capital Partners, Credit Suisse Group AG and Kuok Group and a $200 million payment is due, said the people, who asked not to be identified as the details are private.
Losing the stake in the Australian coal producer would upend a rags-to-riches tale for the 36-year-old electrician turned miner, who sold his house in 2006 to buy into a coal mine. His A$5.3 billion bid for Whitehaven collapsed three months ago as coal prices declined, and two of his closely held companies were last week placed in liquidation.
Tim Allerton, of City Public Relations, a spokesman for Tinkler Group, declined to comment on Tinkler’s financial position. A message left with Tinkler Group in Brisbane requesting comment wasn’t immediately answered. Michael Fisch, an official at Farallon in Singapore, declined to comment.
Tinkler Group, also closely held, is the largest shareholder in Whitehaven, with 19.4 percent, according to an October statement. The stake was gained after Whitehaven took over Aston Resources Ltd. and other Tinkler assets in a A$2.7 billion deal last year. Tinkler made a A$5.20-a-share bid for Whitehaven, which owns seven mines in Australia, in July.
The bid failed after coal prices fell and lenders withdrew support. Whitehaven’s shares dropped 1.8 percent to A$2.81 at the close in Sydney, taking this year’s decline to 47 percent. Farallon has 5.7 percent of Sydney-based Whitehaven according to data compiled by Bloomberg.
Farallon owned 9.5 percent in Aston Resources prior to the Whitehaven takeover, while Kuok Group owned a 5.5 percent stake, according to an Aston Resources presentation in December last year.
Tinkler’s business journey began when he sold his house to help buy the A$30 million Middlemount coal lease in Australia’s Queensland state before selling it a year later to Macarthur Coal Ltd. for about A$465 million in cash and shares.
In May 2008, Tinkler sold his Macarthur stake to ArcelorMittal (MT), the world’s largest steelmaker, at a profit of about A$445 million. He then bought the Maules Creek mine from Rio Tinto Group for A$480 million in August 2010. Seeking funds to develop the project, Tinkler made an initial public offering of Aston Resources, containing Maules Creek, in August 2010, raising A$400 million.
Farallon, Credit Suisse and other investors also helped fund Aston Resources’ acquisition of Maules Creek, providing total loans of $588 million, according to Aston’s IPO prospectus.
Tinkler last week lost control of Mulsanne Resources Pty. after an Australian court ordered its liquidation over a A$28.4 million unpaid debt to coal developer Blackwood Corp. Patinack Farm Administration Pty, another of his companies, was ordered to liquidate the following day. His Ocean Street Holdings Pty and Buildev Group Pty last month settled a dispute with Mirvac Group (MGR) out of court by agreeing to pay the developer A$16.6 million in a failed property deal.
Tinkler and his companies also own coal and metal mining projects, infrastructure investments, a horse-breeding operation, and the Newcastle Knights, a rugby league team in the Australian coal port of Newcastle.
To contact the reporters on this story: Elisabeth Behrmann in Sydney at firstname.lastname@example.org; Brett Foley in Melbourne at email@example.com; Chanyaporn Chanjaroen in Singapore at firstname.lastname@example.org