Nathan Tinkler is plotting a comeback.Picture / Getty Images
Nathan Tinkler is plotting a comeback.Picture / Getty Images
Nathan Tinkler was Australia’s youngest billionaire — now he faces bankruptcy as his coal empire collapses.
Not yet 40, Nathan Tinkler has made and lost a billion dollars. Now, even as he faces bankruptcy, he is setting out to build another fortune.
Tinkler is one of those Australian entrepreneurs who pop up from nowhere every few years and come crashing down to earth soon after, leaving a trail of creditors in their wake.
It took Tinkler, who started his working life as an electrician in the Hunter Valley coal mines north of Sydney, about five years to turn a million dollars he had cobbled together into a billion.
Although he was involved in the coal sector, Tinkler made his money from trading coal leases and coal companies - it's said he never actually mined a bucketload of coal in his life.
His rise to riches began in 2006 when he sold his house and his electrical business to raise the million dollars needed to make a non-refundable downpayment on an undeveloped coal project in Queensland. Unlike the Canadian investors he bought the mine from, Tinkler had a hunch it would contain a lot of high-grade coal.
He had six months to come up with the remaining A$30 million to finalise the deal, which he pulled together from various backers.
Tinkler's hunch proved right. He quickly sold a 30 per cent stake for A$50 million, then offloaded the remainder for A$57 million cash plus a parcel of shares in Macarthur Coal valued at A$184 million.
So far so good, but there was better news around the corner for the newly minted millionaire, only 31 at the time. After a takeover bid for Macarthur Coal he sold his shares for A$442 million.
It was the first of a handful of smart trades propelling Tinkler into the billionaires' club.
He set about a spending spree even Lotto winners could only dream of: a private jet, a soccer team, a first-grade rugby league team, enormous homes up and down Australia's east coast and a huge fleet of cars.
But what he really liked was horses. Tinkler is estimated to have spent A$200 million to A$300 million on livestock trying to build up Australia's most successful racehorse stud farm.
At 35 he was crowned Australia's youngest billionaire, but just two years later in 2013 the price of thermal coal - used to fire steelmaking furnaces in China - had halved and Tinkler's fortune was evaporating.
Everything - the jet, the football teams, the houses, cars and horse stud - has been sold off. He's facing several bankruptcy actions and in July a South Australian court issued an arrest warrant after he failed to show up for proceedings.
But Tinkler isn't the sort of bloke who'll let inconveniences like bankruptcy or arrest warrants stand in his way. Even as his creditors circle, he is plotting a comeback.
He's bought into Australian Pacific Coal and has become its managing director. Along with his partners, he is planning to sink A$13.2 million into the tiny coal company.
If nothing else, the deal reveals that Tinkler doesn't appear to have lost his persuasive powers, which he must have employed to their maximum effect to win the confidence of his new partners.
Most of Australia's billionaires are in their 60s, 70s and 80s. They've patiently built up their fortunes, invested judiciously and occasionally displayed a dash of audacity. Tinkler is nothing but audacity.
There's a fine line between audacity and recklessness, and as Tinkler prepares to dive back into the coalmining game, anyone who decides to do business with him should go in with their eyes wide open.
Rupert Murdoch and son Lachlan face an online threat. Photo / AP
The Murdoch family has declared itself to be innovative, with Lachlan Murdoch saying he will lead industry change at the family's 21st Century Fox entertainment and pay TV company.
"The reality is that our industry has always been evolving and innovating," Murdoch told investors. "The imperative is how we respond to it."
Murdoch's attempt to cast himself as a digital disruptor comes as well-regarded US media analyst Todd Juenger wrote an open letter to the company about the risk streaming services such as Netflix pose to pay TV businesses around the world. Consumers find the idea of paying $40, $60, or $80 a month for a bundled pay TV offering a lot less appealing than paying a fraction of that for a streaming service allowing them to watch shows when they want.
In Australia, Citi Research media analyst Justin Diddams released a survey predicting that, within three years, households subscribing to video on demand will outnumber those now taking Murdoch's Foxtel pay TV service.
The Murdochs aren't disruptors. Rupert's spectacular rise from being a 21-year-old owner of an afternoon newspaper in Adelaide to one of the world's most powerful media magnates has been based on existing industries.
Still, the company has successfully reinvented itself from a newspaper publisher to a broadcaster - time will tell if it will have a successful third incarnation.
