Tinkler teeters on the brink
Tinkler Group has a few other legal muddles to sort through, however, before the former billionaire can say he is home and hosed.
Mr Tinkler has been steadily paying off debts over the past two months, including a reported $20 million owed to retail mogul Gerry Harvey - apparently settled with the transfer of his star colt All Too Hard, to the Vinery Stud part-owned by Mr Harvey - and $5 million owed to Singapore commodities trader Noble Group.
The date of the Noble loan is unknown but it was apparently made last year when Mr Tinkler's cash-flow crisis was most acute and the value of his main asset - a 19.4 per cent stake in Whitehaven Coal - was at its lowest.
Whitehaven has been on a roller-coaster ride over the past few months, partly as a result of uncertainty created by Mr Tinkler himself - with his unsuccessful privatisation bid and a campaign to roll the board - and partly due to weak coal markets, ramp-up troubles at the Narrabri underground, a train derailment, the activist Jonathan Moylan's hoax press release, speculation of a merger with China's Shenhua and uncertainty over the approval of the Maules Creek open-cut. Whitehaven shares sank to a low of $2.74 in November but have recovered to $3.20 as of Tuesday. Tinkler's fortunes have risen and fallen accordingly: from $1.1 billion last April, to the November low of $539 million, the Whitehaven stake is now worth $630 million.
That remains well short of the total of Mr Tinkler's debts to Noonday, the Singapore arm of hedge fund Farallon Capital, which stood at approximately $700 million including principal and accumulated interest, as Fairfax Media reported in December.
The short-term loan from Noble was secured against Mr Tinkler's 75 per cent share of a royalty paid to Oceltip Pty Ltd - at the rate of $1 per tonne of coal from the Middlemount coal mine joint-owned by Yancoal and Peabody - which is subject of a dispute with former partner Matthew Higgins, entitled to the other 25 per cent.
Mr Higgins claims the Oceltip royalty - which has a net present value of $28 million to $34 million after tax, according to analysts - has not been properly accounted for. Mr Tinkler disputes the claim and is trying to have the proceedings shifted from Queensland to New South Wales.
While racking up a few wins on the racetrack, Mr Tinkler's thoroughbred stud is still financially restructuring with Patinack Farm Administration in liquidation and its directors facing a possible insolvent trading claim, as BusinessDay reported on Monday. PFA is itself owed $4.1 million by the Oceltip Investments Trust, which was "used as a type of clearing house", according to the liquidator Anthony Matthews.
Meanwhile, Mr Tinkler, seen in Brisbane last week but resident in Singapore, faces a public examination in the NSW Supreme Court in just over a fortnight by Ferrier Hodgson, liquidators of his Mulsanne Resources. Last year Mulsanne agreed to take up a 34 per cent stake in listed coal junior Blackwood Corporation at 30¢ a share, worth $28.4 million.
Blackwood shares closed on Tuesday at 10.5¢ a share, valuing the entire company to just $19.4 million - meaning it would be cheaper for Mulsanne to take over the whole company than complete the placement deal. Blackwood is 51 per cent owned by Noble and some kind of deal with Mr Tinkler, perhaps involving the Oceltip royalty, may be on the cards.
The publicity-shy Mr Tinkler would be loath to take the stand in court.
Lastly, Mr Tinkler was seeking to recover his private jet and helicopter, which were seized by Taylor Woodings last year on behalf of lender GE Capital, which is owed $US12.4 million. The jet is in Perth and the helicopter in Brisbane and neither have yet been sold.
What's in store for high-flyer's businesses
■ The Federal Court is expected to hear on Wednesday that nine of Mr Tinkler's private companies - including the Hunter Sports Group, Newcastle Knights and Newcastle Jets Football Operations - have paid their tax debts.
■ The wind-up of Patinack Farm Administration, which has debts of $5.1 million, including to the Tax Office, continues and may result in an insolvent trading claim from Adelaide-based liquidator Anthony Matthews.
■ Mr Tinkler's TGHA Aviation, owner of his private jet and helicopter, remains
in receivership owing $US12.4 million to GE Capital.
■ Mr Tinkler faces a liquidator's examination in the New South Wales Supreme Court on March 8 in the $28.4 million dispute with Blackwood Corporation.
■ A dispute between Mr Tinkler's Oceltip Pty Ltd and the MG Higgins Investment Trust, over $1 a tonne royalty from the Middlemount coalmine, returns to the Queensland Supreme Court on March 19.
Frequently Asked Questions about this Article…
Nathan Tinkler is an Australian coal entrepreneur whose Tinkler Group owns sports assets (including the Newcastle Knights and Newcastle Jets) and a range of coal and racing interests. He has been in the headlines because of large debts, court fights with creditors and liquidators, and efforts in the Federal Court to avoid wind‑up proceedings against several of his private companies.
The Federal Court was expected to hear that nine of Mr Tinkler’s private companies — including Hunter Sports Group, Newcastle Knights and Newcastle Jets Football Operations — had paid their tax debts, which could end wind‑up proceedings that began the prior December. The reporting describes this as an expected outcome rather than a final judgment.
Reported creditors include: a reported $20 million settled with Gerry Harvey (allegedly via the transfer of the racehorse All Too Hard), about $5 million to Singapore commodities trader Noble Group, approximately $700 million owed to Noonday (the Singapore arm of Farallon Capital, including principal and interest), and US$12.4 million owed to GE Capital (secured against his private jet and helicopter). Other obligations and liquidations (such as Patinack Farm) also add to the financial picture.
Mr Tinkler holds a reported 19.4% stake in Whitehaven Coal. The value of that stake has swung widely — from about $1.1 billion in April to a low around $539 million in November, then recovering to about $630 million as cited. Movements in Whitehaven’s share price — driven by operational issues, weak coal markets and governance disputes — materially affect the value of Tinkler’s assets relative to his debts.
The Oceltip dispute centers on a royalty from the Middlemount coal mine: Mr Tinkler is said to have 75% of the royalty while former partner Matthew Higgins claims entitlement to the other 25%. Analysts put the net present value of the royalty at roughly $28–$34 million after tax. Noble’s short‑term loan to Tinkler was secured against that royalty, so the outcome of the dispute affects the security of that loan and the value of an asset Tinkler is relying on.
Patinack Farm Administration is in liquidation with debts reported around $5.1 million, including to the Tax Office, and the liquidator has warned of a possible insolvent trading claim. Patinack Farm Administration is also owed about $4.1 million by the Oceltip Investments Trust. Separately, Ferrier Hodgson (liquidators of Mulsanne Resources) is conducting a public examination into Tinkler’s dealings, and there are related issues around a planned Mulsanne stake in Blackwood Corporation.
Tinkler’s TGHA Aviation, which owns his private jet and helicopter, is in receivership. The aircraft were seized by Taylor Woodings on behalf of lender GE Capital, which is owed US$12.4 million. The jet is in Perth and the helicopter in Brisbane; neither had been sold at the time of reporting. For investors, these seizures illustrate the secured‑creditor actions being taken against Tinkler’s assets.
Key dates mentioned include a public examination by Mulsanne’s liquidators in the NSW Supreme Court on March 8 over a $28.4 million dispute with Blackwood Corporation, and the return of the Oceltip royalty dispute to the Queensland Supreme Court on March 19. The article also noted an expected Federal Court hearing about tax payments by nine of his companies. These proceedings could influence asset recoveries, creditor outcomes and the future of Tinkler’s businesses.
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