Retail king Gerry Harvey has called in an estimated $40 million debt from former mining magnate Nathan Tinkler, by selling off Tinkler’s beloved thoroughbred horse farm.
In the latest twist in Tinkler’s dramatic business career, staff at his Patinack Farm told Fairfax they were told to look for new work this week, as Harvey could not “hold on any longer” to recall his debt.
Tinkler has been clinging onto control of Patinack Farm since it was placed in liquidation in 2012.
He confirmed in May he would let go of the farm, announcing to the media he would sell the asset to a consortium of local and overseas parties from the Middle East on a “walk in, walk out” basis for an undisclosed sum.
However, in June Harvey Norman’s top boss revealed to Fairfax Tinkler had borrowed money from him to establish his presence in the racing industry.
Harvey said he had a caveat over Tinkler’s racing interests and any sale of horses or property from Patinack Farm had to be approved by him.
“It has been like this for months and I have been involved with Patinack for years,’’ Harvey told Fairfax.
“I’m a big boy and I knew what I was doing when I got involved and I’m just in the middle of it now. We just have to hope [Tinkler] can get one of these deals over the line and get himself out of it.”
While not confirmed directly by Harvey, the Fairfax report cited unnamed sources in the racing industry who claimed Tinkler’s debts to Harvey could be as high as $40 million.
Patinack Farm is made up of three major properties including a 3300 acre breeding facility at Sandy Hollow in the NSW Hunter Valley, a 1000 acre training facility and stud at Canungra on the Gold Coast, and 950 acres of undeveloped horse country at Monegeetta, Victoria close to the racecourses of Melbourne.
It currently has bloodstock of 560 horses.
Harvey is expected to sell the farm at the end of September through his Magic Millions horse auctions on the Gold Coast, with an expected price tag of about $30 million.
He told Fairfax this week Tinkler had “decided to stick with something he knows really well, coalmining, and therefor he will get out of the racing industry”.
Harvey said the two were still on good terms despite their business concerns and would be in contact at least once a week in the lead up to the sale.
“He is busy out there trying to make another fortune in coal,” said Harvey.
“And, who knows, if he does make that fortune maybe he will get back into the horse industry one day. You never know.”
A former Hunter Valley mine electrician, Tinkler made and lost his fortune through speculative coal plays in 2009 and 2012.
After losing his mining fortune when coal prices slumped in 2012, Tinkler re-entered the coal game in May this year with the $150 million purchase of Peabody Energy’s Wilkie Creek mine in Queensland.
In July, Tinkler missed a payment on the Peabody acquisition, raising fears his resource sector comeback could be in jeopardy.
Fairfax today reported unnamed sources have indicated Tinkler intends to use a Western Australian shell company to complete the purchase.
Tinkler declined to speak to SmartCompany this morning, while Harvey was unable to be reached for comment by the time of publication.