Tinkler’s woes have many on the sidelines rubbing their hands with glee: Analysis

If schadenfreude were a commodity, its price would be slumping.

Most Australians looking at the rapid fall of Nathan Tinkler have at least a glimmer of glee. One of the fastest ascents has been matched by one of the greatest falls?—?with the one-time billionaire a virtual bankrupt according to many (or worth $700 million, according to himself).

Tinkler had the rare combination of extraordinary chutzpah, a huge large dose of luck and splendid timing. Unlike the great Australian entrepreneurs?—?Frank Lowy, Sidney Myer, Frank Packer, et al?—?Tinkler didn’t actually create any value. He was a paper shuffler, more like Alan Bond.

Tinkler had a stunning run since raising $1 million to purchase a bunch of coal tenements in 2006 (which were later sold to Macarthur Coal for $400 million). Tinkler used those profits to purchase the Maules Creek coal mine from Rio Tinto in 2009 for $480 million. The mine became part of Aston Resources which Tinkler the merged with the listed Whitehaven Coal. At one time, Tinkler’s stake in Whitehaven was valued at $1 billion (less the debt attached). The value of that stake is now $500 million.

Tinkler owns 21% of Whitehaven Coal but has no executive role in the business, nor is he even a director of the company. He is at best a courageous investor?—?he leveraged everything he had into two very shrewd acquisitions. He is at worst an addicted gambler whose success came from avoiding payments of debts and a couple of lucky bets. Like most things, the truth probably lies somewhere in the middle.

In the New South Wales Supreme Court last week, Tinkler told Robert Newlands QC, who was acting on behalf of the liquidator of Mulsanne Resources (Tinkler’s private company), he was the beneficiary of a $1.4 billion trust. The trust is allegedly controlled by Tinkler’s wife, Nicole. A few minutes later Tinkler said the trust had $1.2 billion, and the assets weren’t exactly liquid, but what’s a few hundred million when you were once Australia’s youngest billionaire?

From all reports, and this writer hasn’t had the pleasure of meeting Tinkler, he is a rather unpleasant man. Tinkler once told a journalist he was a “deadbeat” who climbed “out of your bed every morning for your pathetic hundred grand a year”. Tinkler has never publicly disclosed any substantial charitable donations, but once purchased a $15 million Dessault Falcon corporate jet, an Augusta A109S helicopter as well as two sporting teams.

But back to Tinkler’s current financial situation?—?the former billionaire claims that he is the beneficiary of a trust that has net assets of around $700 million. However, Tinkler was forced to sell his plane, helicopter and champion racehorse All Too Hard to Gerry Harvey, and recently, his entire horse racing enterprise, Patinack Farm Administration, was placed in liquidation with debts owing to the Tax Office and entitlements to staff. Most critically, and the subject of the current liquidation hearing, Tinkler was unable to fund a relatively trifling $28 million commitment to Blackwood Corporation. That doesn’t sound like someone with net assets of $700 million.

Given Tinkler’s empire was built on debt, which requires trust of lenders, his actions cast a death knell over his future business endeavours. No lender in their right mind would ever lend to the former electrician given his apparent willingness to hide the corporate veil to avoid repaying debts.

That leaves two real options: either Tinkler is a Bond-esque character who views his obligation to creditors with scant disregard, or the former richest Australian under 40 is effectively broke. The latter appears more realistic (although the former may also be true). Given that Tinkler’s stake in Whitehaven, which appears to be his last remaining asset of any real significance, is worth $500 million, there appears little chance he is the beneficiary of a trust with more than $1.2 billion in assets (Tinkler also owns real estate in Queensland believed to be worth around $15 million).

It’s understood Tinkler’s horse racing follies cost him upwards of $200 million, while his stake in Whitehaven has dropped in value by almost $700 million. That’s a lot of losses.

In addition to a collapsing business empire, Tinkler remains very good at collecting enemies. He has been sued by almost everyone he’s ever worked with, including long-time business partner Matthew Higgins, former Aston CEO Hamish Collins, former partner in a luxury car club Timothy Summers and even Sheikh Mohammed’s Kildangan Stud.

It appears there would be very few people saddened by the demise of Nathan Tinkler. Other than perhaps his creditors.

This article first appeared on Crikey.


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