Tinkler Dodges Bankruptcy in A$28m Blackwood Case

Issue 46, June 2013

Mine electrician turned coal mine owning billionaire Nathan Tinkler appeared to dodge bankruptcy this week, striking a last minute settlement with Blackwood Corp, which has relentlessly pursued him through Australia’s courts since September last year. Blackwood said Monday that it would drop insolvent trading charges for A$12m ($11m), to be paid by the end of June.

The settlement follows a share placement agreement in May 2012, under which Tinkler offered A$28.4m for 34 per cent of Blackwood’s stock. In court, he has said that he expected the money from Hong Kong based commodities house Noble Group, in exchange for a $1 per tonne royalty his family trust holds over the Middlemount coal mine in Queensland. “I was hung out to dry,” he claimed, after the royalty sale fell through.

Middlemount marked the first of a string of deals that propelled Tinkler to a coal-borne fortune. In 2007, he borrowed A$1m against a mine machinery business he built from scratch, using it as a deposit for the Middlemount license. He raised further funding in Asia, drilled the deposit and sold it to Macarthur Coal for 10 per cent of its stock, which he shunted on to ArcelorMittal for A$440m in May 2008, at the height of the coal price boom.

At its bottom, he bought Maules Creek for A$480m from cash-strapped Rio Tinto subsidiary Coal & Allied. He then listed Maules, sold down stakes to Japanese utilities and folded the asset into Whitehaven Coal, alongside his private company Boardwalk Resources, gaining shares worth A$989m.

The value of his 19.4 per cent stake has since crumpled to A$438m, forcing him to sell his racehorse stable and a sprawling new build in Brisbane, under pressure from interest payments. The Australian Tax Office meanwhile requisitioned his helicopter and private jet.

In recent weeks, Tinkler has however seemed to turn a corner, paying off creditors including the tax office, an advisory group to the botched Blackwood deal and former business partners Hamish Collins and Matthew Higgins.

For admirers of Tinkler’s audacious eye for an overlooked coking coal deposit, the settlements promise his return to the dealmaking table, currently overloaded with assets waiting to be sold. Shares in Blackwood Corp remain unconvinced, flat at A$0.05.

“I was hung
out to dry.”

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