Tinkler’s coal interests go in $600m sell-out

NATHAN Tinkler’s full 19.4per cent share in coal company Whitehaven has been sold to his lenders to help repay debt.

The sale puts question marks over Mr Tinkler’s future hold on the Newcastle Knights and the Newcastle Jets, even though the businessman’s spokesman said there would be ‘‘no impact at all’’ on the two clubs.

The Tinkler camp put a positive spin on the news yesterday but it appears Mr Tinkler’s days as a big-time coal baron are over, at least for now.

The market has long speculated on the amount of debt carried by Mr Tinkler and yesterday’s sale appears to have wiped as much as $580million from a reported bill of more than $600million.

But a lack of detail about part of the transaction means it is possible that Mr Tinkler could have walked away with some cash from the deal.

Indeed, Fairfax Media reported yesterday that Mr Tinkler was setting up a new business empire in Singapore under the moniker of Bentley Resources.

Yesterday’s dramatic proceedings began when Mr Tinkler’s biggest backer, the Singapore hedge fund Farallon Capital Management, confirmed it was buying 11.53per cent of Whitehaven. With its existing 5per cent holding, its stake would go to 16.62per cent and it was seeking Foreign Investment Review Board permission for the amount beyond 15per cent.

Farallon confirmed paying $2.96 a share, about 40per cent above their market price, valuing its part of the transaction at $350million.

The $2.96 is understood to be a ‘‘floor price’’ built into the Tinkler/Farallon loan agreements, meaning this was the minimum amount that Mr Tinkler’s shares would be valued at by his lenders. In a statement to the stock exchange, Farallon’s lawyers said the sale was ‘‘to partly repay debt’’.

In a separate statement, Whitehaven said ‘‘the balance of the Tinkler shares have been sold to other members of the Tinkler lending syndicate’’.

There was no indication in the market statements how much the other purchasers paid for their shares but if they paid the same $2.96 as Farallon then Mr Tinkler would have raised another $235million.

Mr Tinkler’s spokesman, Tim Allerton, confirmed all of the Tinkler Group’s Whitehaven shares would go in the transaction. Given that this would leave Mr Tinkler with no Whitehaven shares, the Newcastle Herald asked questions about the former billionaire’s financial position and the future of the Knights and the Jets. Mr Allerton said there was ‘‘no comment’’.

At a liquidator’s examination in March this year, Mr Tinkler told the NSW Supreme Court his debts were ‘‘probably about $500million’’.

Although such an event has been predicted for some time, yesterday’s Whitehaven sale took the market by surprise.

It came a week after the company posted a market update confirming a difficult half-year dominated by weak coal prices and a strong Australian dollar, driving Whitehaven towards a likely loss of $18million for the half-year.

Yesterday, Whitehaven chief executive Paul Flynn said the transaction meant Farallon was now its largest shareholder and he welcomed its further investment in the business.

Whitehaven shares rose by 9per cent on the news but had halved this gain by the afternoon to be at $2.20.

At 16.62per cent, Farallon remains under a 20per cent limit that would have forced it to make a full takeover bid or have its holding approved by a full meeting of shareholders.

‘‘Selling this stake was a difficult decision,’’ Mr Tinkler said in a statement. ‘‘However, we believe [it] will benefit all shareholders.

‘‘Whitehaven’s asset base … provides for a strong future.’’

Mr Tinkler continues to hold a range of private assets including the Patinack Farm horse stud, a royalty stream from the Middlemount mine (split with a business associate) and an interest in copper exploration in central Queensland.

Mr Tinkler has been seeking to sell horse assets as well as property held through his Buildev company. Patinack Farm Administration still has debt claims against it of $5.4million, including $4.6million owed to the tax office.

Nathan Tinkler