* Whitehaven not considering buyback of Tinkler stake
* Denial of sale prolongs uncertainty over miner's fate
* Options limited for selling Tinkler's 19 percent stake
* Talks between Tinkler, lenders, "not for us to meddle
(Adds CEO comments, details on Tinkler)
By Sonali Paul
MELBOURNE, April 18 The new CEO of Australia's
Whitehaven Coal poured cold water on speculation of an
imminent sale of struggling tycoon Nathan Tinkler's stake in the
firm, one of many uncertainties that have dragged its share
price to a four-year low.
Whitehaven CEO Paul Flynn told Reuters the company is not in
talks with any potential suitors and is unaware of anyone
waiting in the wings. That means it is unlikely any strategic
player is looking to grab Tinkler's 19 percent stake as a
precursor to a bid for the entire company.
"We don't have any potential proposals before us in that
regard, nor discussions about those things in any ongoing
fashion," Flynn said in a phone interview late on Wednesday.
Expectations of a pending sale have been fuelled by talk
that Tinkler's lenders, led by Noonday Asset Management, a unit
of U.S. hedge fund manager Farallon Capital Management LLC, want
to call in their $600 million loan to Tinkler. Flynn's denial
will only prolong the uncertainty over the miner's fate, which
has been hard-hit by a 35 percent plunge in coal prices since
Whitehaven said last December it had held talks with China's
Shenhua Group Corp Ltd about a potential corporate or
asset deal. Bankers familiar with the matter have said China's
biggest coal producer is no longer interested.
Flynn also knocked down speculation that Whitehaven has held
discussions with Noonday about ways to sort out the problem.
"The issue you're pointing to is between a borrower and a
lender, and it's not for us to meddle in the affairs of a
shareholder, no matter how large, between themselves and their
lender group," he said. "So that's the beginning and end of our
involvement in that dialogue."
Whitehaven's shares have sunk due to weak coal prices,
delays on its key growth project and uncertainty over the fate
of Tinkler's stake. The stock last traded down 3.5 percent at
Tinkler's stake in Whitehaven, the main source of his
wealth, is pledged against the $600 million loan and is now
worth less than A$400 million ($412.30 million). The stake's
value has plunged 63 percent over the past year.
Options for selling his holding are limited.
If Farallon Capital Management was to take over Tinkler's
stake, the hedge fund would end up crossing the 20 percent
threshold and would be forced under Australian rules to make a
takeover offer for the whole company. Farallon already owns 5.7
percent of the company.
One option could be to sell down Tinkler's shares to other
funds, including Switzerland-based AMCI and U.S.-based First
Reserve Corp, which together with their founders control 16
percent of Whitehaven.
Flynn said he believes AMCI and First Reserve are not about
to give up on the company, but declined to comment on whether
they want Tinkler out.
"They seem to me to be very comfortable with the underlying
value of the business and certainly our discussions would lead
me to believe they wouldn't see the current share price as
anywhere near reflective of that underlying value," he said.
Flynn played down the idea that Whitehaven could buy back
Tinkler's stake, a process that would involve shareholder
"We do examine all sorts of options that we think might be
productive to driving value for the whole shareholder group, but
certainly a buyback at this point in time is not something we're
contemplating," he said.
The company is focused on reviving its value by cutting
costs, fixing problems at its Narrabri mine and securing
government approval for the Maules Creek project, both in the
state of New South Wales, while it expects no improvement in
coal prices in the near term, he said.
Tinkler has been the target of several lawsuits in Australia
to recover millions of dollars in unpaid debts, the most
prominent of which is an ongoing case brought by small coal
explorer Blackwood Corp Ltd for A$28.4 million ($29.3
million) over an agreed share placement deal.
A number of the cases have been settled out of court, but
Tinkler has put his beloved thoroughbred racing and stud empire,
Australia's largest, up for sale. His private helicopter has
already been seized by creditors.
($1 = 0.9702 Australian dollars)
(Additional reporting by Jane Wardell in SYDNEY; Editing by