Good times ahead....one would think, particularly as the $AUS continues to track south.
Black day for coal baron Nathan Tinkler as he loses control of Whitehaven
John Dagge •
Herald Sun •
June 19, 2013 9:00PM
FALLEN coal baron Nathan Tinkler has lost control of his key financial asset, with his lenders taking over his major stake in Whitehaven Coal.
Mr Tinkler, once the youngest billionaire in Australia, has sold his near 20 per cent stake in the miner to his financial backers in a deal likely to be worth about $600 million.
US hedge fund Farallon Capital has effectively seized the bulk of the shareholding. The deal, announced Wednesday, may open Whitehaven up to renewed takeover interest.
It comes after Mr Tinkler was chased through the courts for unpaid debts and forced to sell his private jet and prized race horses.
Mr Tinkler, through his companies Aston Resources and Boardwalk Resources, sold 101 million Whitehaven shares to Farallon for $2.96 a share.
The shares represent about half of what was a 19.4 per cent stake in Whitehaven, which has lost two-thirds of its market value over 14 months.
Mr Tinkler's lending syndicate has bought the rest of stake, Whitehaven said in a statement.
BusinessDaily believes Investment bank Credit Suisse and Singapore's Kuok Group are among the lenders.
Farallon is paying a 40 per cent premium to Whitehaven's closing price on Tuesday, before the deal was announced.
If Whitehaven's share price has climbed above $2.96 by early next year, it will make an extra payment.
But the price is substantially less than the $6 a share Whitehaven was worth when it bought Aston and Boardwalk in April last year.
Farallon, which emerges as the major shareholder in Whitehaven with a near 17 per cent stake, has been Mr Tinkler's key financial backer throughout a rollercoaster career.
His debt pile has been estimated as high as $700 million, with the bulk owed to Farallon. The hedge fund said the sale proceeds would be used to "partly repay debt".
A statement from The Tinkler Group said its 37-year-old chief was happy with the sale price despite feeling it significantly undervalued the miner.
"Many will be aware of the emotional attachment that Mr Tinkler has to the assets of the company," the statement said. "However we believe that no longer being a substantial shareholder of Whitehaven will benefit all shareholders."
Morningstar analyst Gareth James said Farallon was unlikely to be a long-term shareholder and any move to offload its stake could open the company up to a new takeover bid.
Late last year state-owned Chinese coal giant Shenhua discussed a takeover deal.
"We don't see Farallon as natural long-term holders of Whitehaven shares and the process of finding a buyer may open the company up to a takeover offer," Mr James said.
Whitehaven's share price rallied 4.3 per cent on Wednesday to close at $2.20.