BREAKFAST DEALS: Tinkler fizzle

Nathan Tinkler misses a Mirvac settlement date, while Macquarie Capital rolls the dice on a NSW Lotteries royalties sale.

Coal tycoon Nathan Tinkler is showing yet more signs of financial stress, with Mirvac saying he’s failed to settle a $17 million payment over a land deal. Could the end of the Whitehaven Coal privatisation give him a little more room to move with these other deals? Meanwhile, the NSW government has called in Macquarie Capital to look at selling its NSW Lotteries royalties. Elsewhere, Goodman Fielder looks to sell some factories after offloading Integra, TRUenergy snaps up some clean energy and an interesting aspect of the Dulux-Alesco stand-off gets some closer attention.

Nathan Tinkler, Ocean Street Holdings, Buildev Group, Mirvac

The inability of coal mining tycoon Nathan Tinkler to pay his bills looks to have spread into his property interests.

Two of Tinkler’s private companies agreed to purchase industrial land in Newcastle from listed company Mirvac as part of an agreement reached in July last year.

The relationship quickly became rocky. Mirvac’s arm Domaine Steel River sued and secured an order from the Supreme Court of NSW compelling Tinkler’s companies Ocean Street Holdings and its guarantor Buildev Group to complete the $17 million payment.

According to media reports, Mirvac now claims that settlement has not occurred.

The news comes on the back of Tinkler’s failure to pay coal junior Blackwood Corporation $28.4 million for a 33.9 per cent stake, via his private company Mulsanne Resources.

Blackwood chief executive Todd Harrington said late last week that the company’s board "continues to investigate and consider its options,” a tried and tested euphemism for contemplating a call to the lawyers.

Tinkler has remained pretty quiet throughout these two episodes, choosing instead to focus his attention publicly on the now collapsed bid to privatise Whitehaven Coal – the source of most of his estimated wealth – for $5.3 billion.

It’s long been suspicions that Tinkler is facing significant personal debts and the apparent cashflow problems have only reinforced them.

It’s been reported that Tinkler’s personal debts could total $683 million, though a spokesperson for the Newcastle Knights owner says it’s a mere fraction of that number.

If that’s the case, why is Tinkler so strapped for cash? Remember those reports about the staff at Tinkler’s Patinack Farm horse racing business hasn’t been paid superannuation since November.

There is the possibility that Tinkler kept everything tightly held in the lead up to the Whitehaven deal. If that’s the case, he could now be more freed up to tend to these troubled side projects.

NSW government privatisations

The NSW government has apparently told Macquarie Capital to go ahead and investigate whether it can flog the $321 million a year it receives from NSW Lotteries to pay for infrastructure projects.

According to The Australian Financial Review, it was Macquarie that pitched the proposal to the NSW government in the first place. The proposal could raise up to $1.5 billion.

As the newspaper’s Chanticleer columnist, Tony Boyd, points out this morning, this could culminate in an extra $10 billion for the NSW budget when you take into account the privatisations of Port Botany, Port Kembla and the electricity generators.

The government is tipped to announce that a sale process could begin as early as January.

Goodman Fielder

Because of the attention that centred on the purchase price that GrainCorp consented to for oilseed crusher Gardner Smith, the seller on the other transaction the grains handler did that day was largely ignored.

Goodman Fielder, which offloaded its Integro edible oil and fats business to GrainCorp, for $170 million.

Goodman now says it intends to sell off or close at least 15 factories within the next three years. At the same time, chief executive Chris Delaney says the marketing expenditure will be reduced from 30 categories to just five.

While the pricetag was a little below some expectations, the consensus in the aftermath of the sale is the proceeds are necessary to help the company simplify its business model.

CLP Holdings, TRUenergy, CBD Energy

TRUenergy’s Hong Kong owner CLP Holdings might have disappointed the Australian market last month by delaying the float of the utility company until next year, but it’s still participating in local deals.

Listed renewable energy company CBD Energy announced that it has negotiated a $300 million deal with TRUenergy covering all the power from its 51-turbine Taralga wind farm in New South Wales.

Construction of the plant hasn’t begun yet, but is expected to get going later this year.

TRUenergy’s main incentive for the purchase is the government’s "20 per cent by 2020” target.

DuluxGroup, Alesco Corporation

The farcical takeover discussions between DuluxGroup and Alesco Corporation, which appear to be off at least until the Takeovers Panel gives us more insight into the encounter, could ultimately result in the acceleration of long-term incentives for the target’s directors.

The Australian Financial Review’s Mike Smith points this morning that it’s a common feature of takeover offers the key figures within the company that’s acquired receive certain benefits even if performance hurdles aren’t met.

Before any of this becomes a possibility, the Takeovers Panel has to tell us what it thinks about Alesco’s application that the "truth in takeovers” policy of the Australian Securities and Investments Commission should not apply to the negotiation over franking credits with Dulux.

Whatever the outcome of that decision, it’s a tumultuous time to be handing advanced incentives to senior staff.

Chief executives at several major companies, including BHP Billiton and Qantas Airways, have been declining bonuses this reporting season to ease investor frustration with gloomy results and outlooks.

While Alesco could claim to be a victim of circumstance at various stages of this encounter this Dulux, both companies have made strategic missteps.

Although you could also make the compelling case the Alesco directors have hardly run into the arms of Dulux with the aim of securing advanced bonuses.

If the Takeovers Panel injects some new life into the talks between these two companies, this issue will resurface. Keep an eye on it.

Wrapping up

The Queensland-based Quinn family, known better for chilled pet foods, have picked up the Darrell Lea following its time with administrators PPB Advisory.

Hundreds of employees will be laid off and dozens of stores closed as the new owners consolidate the footprint of the iconic, but struggling chocolate maker to give it a sustainable future. The price of the transaction was not disclosed.

Meanwhile, UGL chief executive Richard Leupen has told The Australian that he’s on the look out for acquisitions for the property services division in the next year as the company expands its presence in the US.

Leupen couldn’t bring himself to rule out another run at Transfield Group, which UGL tried to grab in 2010. He did say the play is "very different” from two years ago, but he lives by the mantra of never say never.

Leighton Holdings’s Middle Eastern arm has picked up some more work in the region, signing a $US68 million ($66 million) contract for constructing reservoirs in Qatar. Habtoor Leighton Group won the work from Qatar General Electricity and Water Corporation, following a $US210 million contract signed three years ago, also to build reservoirs.

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