INVESTORS reacted cautiously on Monday to renewed speculation that the Chinese miner Shenhua Group could move to buy Nathan Tinkler's stake in Whitehaven Coal.
Reuters reported that Mr Tinkler's main lender, Noonday, an arm of the US hedge fund Farallon Capital, was in talks with Shenhua and an unidentified Japanese firm about the sale of Mr Tinkler's 19.4 per cent stake in Whitehaven, which was worth $675 million at Monday's closing price of $3.43, up 4¢ or 1.2 per cent.
As reported by Fairfax Media on December 21, Mr Tinkler's debts to Farallon including principal and accumulated interest are believed to be about $700 million and secured against his stake in Whitehaven.
A number of Mr Tinkler's private companies are facing wind-up actions, mainly from the Tax Office, including the entities that own the Newcastle Knights and Newcastle Jets football teams. But corporate filings show wind-up proceedings against Mr Tinkler's Boardwalk Investments, initiated by Brisbane-based McGees Property over fees on a commercial property purchase that did not proceed, have been withdrawn after a settlement was reached before Christmas.
Whitehaven shares have risen significantly since their November low of $2.74, and jumped 8 per cent in mid-December on confirmation it had held talks with Shenhua, citing "obvious potential synergies" between their assets in the Gunnedah Basin.
But Whitehaven said Shenhua had not proposed to sell assets assets to Whitehaven, and had not proposed acquiring Whitehaven.
Octa Phillip analyst Lawrence Grech said that with final approval pending for Whitehaven's Maules Creek project, it "made sense" that Shenhua would be interested in getting involved with Whitehaven at either asset or corporate level.
But he said Shenhua's Watermark site in the Gunnedah Basin was "undeveloped and controversial", and Whitehaven did not need new growth options as it owned the Vickery and Vickery South projects.
Mr Grech said he was "a little bit surprised" at reported comments by its managing director, Tony Haggarty, that Whitehaven would be interested in selling down its 75 per cent stake in Maules Creek, perhaps selling 5 per cent to a coal customer.
Another analyst, speaking off the record, said he was "sceptical" that Shenhua would seek to take a large stake in Whitehaven as a way of disposing of the Watermark project.
Any sale of Watermark to Whitehaven would be a related party transaction, and Shenhua would be unable to vote either as a shareholder or director if it took a board seat.
Mr Haggarty has said that the sale of Mr Tinkler's Whitehaven stake, perhaps to a spread of financial institutions, would be "ideal".
Neither Whitehaven nor Mr Tinkler's spokesperson would respond to the speculation.