Published June 18, 2013
MELBOURNE – Struggling Australian tycoon Nathan Tinkler has given up nearly half of his stake in Whitehaven Coal Ltd for about $285 million to pay down debt to a U.S. hedge fund, easing concern about a forced selldown that had weighed on the miner's value.
The U.S. fund, Farallon Capital Management picked up a 9.9 percent stake from Tinkler and entities associated with him, taking its holding in Whitehaven to 16.6 percent, it said in a shareholding notice to the Australian stock exchange.
Farallon is buying the shares at a minimum of AS$2.96 each, valuing the deal at around A$300 million ($285 million). The fund may pay an additional amount if the shares trade higher between January and March next year.
"Farallon believes the current market price of Whitehaven shares does not reflect the value of the company," it said in a U.S. announcement.
"The Farallon Funds now have a sizeable investment in Whitehaven, and Farallon looks forward to growth in shareholder value over time," it said.
Pit electrician-turned-tycoon Tinkler has come under pressure over the past year as coal prices have tumbled by around 30 percent, diminishing his wealth that was largely tied to his one-fifth stake in Whitehaven.
Farallon and its unit Noonday Asset Management had loaned $600 million to Tinkler, backed by his stake in Whitehaven, and speculation grew earlier this year that Tinkler would be forced to sell his stake when they called in their loan.
Tinkler has been the target of several lawsuits in Australia to recover millions of dollars in unpaid debts, with most of them settled out of court. He has put his thoroughbred racing and stud empire, Australia's largest, up for sale, while his private helicopter has already been seized by creditors.
Whitehaven shares last traded at A$2.11.
($1 = 1.0564 Australian dollars)
(Reporting by Sonali Paul; Editing by Richard Pullin)