Australian electrician turned mining magnate Nathan Tinkler is reportedly losing $4.2 million a day on his stake in Whitehaven Coal (ASX:WHC), the country’s largest independent coal producer by market value. The reason, reports Mining Australia, is his failure to secure a financing package to fund the ambitious $5.5 (A$5.3) billion move on the company.
The New South Wales-based miner said on Friday it had been advised that a “formal binding proposal” of A$5.20 a share would “not be forthcoming”, a day after the end of due diligence.
Tinkler’s decision topped a grim week for the Australian resources sector that saw BHP Billiton ditch its $20 billion expansion of its Olympic Dam project and delay a large iron ore project in Western Australia. Australia’s resources minister was also forced to backtrack on comments declaring the country’s resources boom “over” amid political criticism.
Whitehaven's share price has been down in the last month, not only on falling commodity prices and weak market conditions, but on diminishing investor confidence that Tinkler could finance his bid to privatize the company.
Analysts don’t give up
In an investor note this morning Foster Stockbroking analysts said while Tinkler had dumped takeover plans Australia's largest independent coal player was "still strong".
"We maintain our view that Whitehaven is fundamentally undervalued and represents attractive buying opportunity at these levels," they said.
Major global miners have all been battered by weaker prices for iron ore, copper, coal, nickel and aluminum as economic growth in China, one of the world’s largest consumers of those commodities, slows to its frailest pace in over a decade.