Nathan Tinkler, the biggest shareholder in Whitehaven Coal Ltd. (WHC), lost control of one of his companies after an Australian court ordered its liquidation over an unpaid debt.
New South Wales Supreme Court Registrar Nicholas Flaskas today granted Blackwood Corp. (BWD)’s request to wind up Tinkler’s Mulsanne Resources Pty. after it failed to pay A$28.4 million ($30 million) it owed for shares in the coal developer. Tinkler didn’t contest the order in court.
The ruling means Tinkler, an electrician-turned-mining investor who’s lost about A$480 million as Whitehaven shares slumped this year, is now exposed personally to creditors, Marina Nehme, a senior lecturer at University of Western Sydney’s School of Law, said today in a phone interview. The magnate, who also owns other mining projects, a horse-breeding operation and a rugby league team, last month settled a dispute with Mirvac Group (MGR) over a failed property deal out of court.
The liquidation “puts him in danger,” said Nehme, who has a PhD on the use of enforceable undertakings by the Australian Securities and Investments Commission. If the directors fail to pay the debt “then the directors will be bankrupt.”
Blackwood can pursue him, other Mulsanne directors and possibly the Tinkler Group, to pay the debt if the liquidated company doesn’t have the assets to cover what it owes.
“The Tinkler Group has no comment but stresses the liquidation of Mulsanne Resources Pty does not affect our other operations,” the company said in an e-mailed statement.
Blackwood shares plunged 22 percent to 14 Australian cents at the 4 p.m. close in Sydney, the biggest decline in more than four years.
Tinkler is listed as one of three directors of Mulsanne in an ASIC company extract. Mulsanne was created in April, and agreed in May to invest A$28.4 million for a 34 percent stake in Blackwood, which is controlled by commodity trader Noble Group Ltd. and is developing coal mines in Queensland state.
Today’s court order means the powers of Mulsanne’s directors are suspended and the liquidators, Robyn Duggan and John Melluish of Ferrier Hodgson, take control of the company, according to a statement from Blackwood.
Tinkler’s business journey began when he sold his house in 2006 to help buy the A$30 million Middlemount coal lease in Queensland before selling it a year later to Macarthur Coal Ltd. for about A$465 million in cash and shares. More recently, his wealth and personal indebtedness has been the subject of speculation.
Whitehaven said in August Tinkler abandoned his plan to take over the coal miner for A$5.3 billion without giving a reason. The company’s stock has fallen 46 percent this year, as coal prices declined.
Tinkler has avoided having other companies forced into liquidation with last-minute settlements with creditors this year.
Mirvac sued Tinkler companies Ocean Street Holdings Pty and Buildev Group Pty for failing to complete a land purchase north of Sydney. The companies settled on Oct. 23 as a court hearing was due to begin, with Ocean Street and Buildev agreeing to pay Mirvac A$16.6 million. Tinkler also settled a A$2 million dispute with contractor Sedgman Ltd. (SDM), according to the Australian Financial Review.
Patinack Farm, Tinkler’s racehorse operation, avoided liquidation last week by settling a lawsuit filed by the New South Wales Office of State Revenue and paying a A$259,866 claim, the Sydney Morning Herald reported.
The Herald Sun reported Sept. 23 that Tinkler owes at least A$170,000 to the Newcastle Knights rugby team.
Tinkler’s “financial difficulties are a matter of some notoriety,” Jason Lazarus, a lawyer representing Mirvac’s Domaine Steel Pty unit, said at a Sept. 10 hearing in Sydney.
The case is In the matter of Mulsanne Resources Pty. 2012/00296966. Supreme Court of New South Wales (Sydney).
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