* Tinkler faces court over $29 mln Blackwood Corp share deal
* Legal woes reveal rollercoaster commodities ride
By Jane Wardell
SYDNEY, March 14 Nathan Tinkler became
Australia's youngest billionaire in record time thanks to a
series of aggressive bets on the country's coal mining sector.
But the man who started his career as a pit electrician
acknowledged on Thursday he may have attempted one risky deal
too many, leaving him with an undiversified portfolio that was
heavily exposed to plummeting coal prices.
"I got left holding the can," Tinkler told an Australian
court during a grilling about his failure to pay junior coal
explorer Blackwood Corp Ltd A$28.4 million ($29.1
million) for an agreed share placement deal.
Tinkler, 37, flew in from his home in Singapore to take the
stand - the first time he has faced public scrutiny since
creditors began chasing him to recover millions of dollars in
Along with other Australian mining barons, such as heiress
Gina Rinehart, the eccentric Clive Palmer and Fortescue Metals
Group Ltd's Andrew Forrest, Tinkler is facing a sharp
tail-off in the country's wealth-generating decade-long mining
But unlike his peers, who have businesses stretching across
sectors including iron ore and gas, the young upstart put all
his eggs in the coal basket.
Tinkler had so much faith in the coal industry, he revealed
to the court on Thursday, that he had begun talks with Blackwood
to buy assets from Brazilian miner Vale SA even
before the share placement had been completed.
Instead, Tinkler said he - and everybody else - was caught
out by a sudden downturn in the coal market that led his
prospective financial backer for the deal, commodities house
Noble Group, to leave him in the lurch.
"I had a clear path to fund this -- that path fell away and
market conditions changed," he said.
A Noble spokesman said he had no comment about Tinkler's
Tinkler had been threatened with arrest if he did not appear
in court on Thursday after losing a legal bid to stop the
examination going ahead.
Wearing a slightly too-large navy suit and looking slimmer
than he has in previous public appearances, Tinkler said he had
believed he had an agreement with Noble to buy his royalties
from Yancoal Australia Ltd's Middlemount mine, which he valued
at A$25 million to A$30 million.
But under repeated questioning from Robert Newlinds, the
lawyer for liquidator Ferrier Hodgson, Tinkler acknowledged
there was no written agreement or "letter of comfort" from
Noble, a long-term business partner, about the royalty deal.
"I certainly wish I had done that," Tinkler told the court.
"I had a strong working relationship with Noble," he said,
noting deals of much larger value he had conducted with the
commodities trader. "I had no inkling that I would need to go to
that level of certainty, or comfort if you like, to put that in
He said he was unsure if he had made notes or exchanged
emails with Noble executive William Randall on their talks.
Tinkler also mentioned preliminary talks with major lenders
about potential financing for the deal, including the use of
three of his houses in Australia worth up to A$20 million as
Tinkler made his fortune selling a coal tenement in 2007,
only to lose his billionaire status when coal prices slumped
last year. At the peak of Australia's once-in-a-generation
resources boom, he spent millions on racehorses and sports
He has been forced to sell assets including horses from his
large stable. Liquidators have seized his private jet and
WHITEHAVEN STAKE AT RISK
The Blackwood case is one of a series of lawsuits against
the former billionaire over unpaid bills and commercial disputes
that have raised questions about the future of his main asset, a
near one-fifth stake in Whitehaven Coal Ltd,
Australia's largest independent coal miner.
Whitehaven's shares have plunged more than 25 percent since
the start of the year following a profit downgrade and the
announcement of a management reshuffle, leaving the value of
Tinkler's 19.4 percent stake - once worth more than A$2 billion
- at just over A$500 million.
That's less than a A$600 million loan that sources have told
Reuters he owes against that stake to his main backer, U.S.
hedge fund manager Farallon Capital Management LLC's asset
Noonday, which heads the loan consortium that includes
Credit Suisse Group AG, has been looking at options
including pressing for the sale of shares or converting some of
the loans into equity, sources have told Reuters.
If liquidators find that Mulsanne cannot cover the Blackwood
liability, Tinkler could face charges or fines for insolvent