Tinkler's debt woes could do harm to Whitehaven shares

The financial and legal difficulties of Nathan Tinkler could harm Whitehaven shares (ASX:WHC) with expectations that the Australian mining magnate will dump his holdings in the fledgling coal miner.

Sky News reports that Tinkler's burgeoning debt problems as well as the legal travails of Mulsanne Resources have led many to speculate that the electrician-turned-mining-tycoon will dial down his 21% stake in Whitehaven.

Analysts point out that Tinkler relied upon debt to pay for a large amount of his sizable stake in Whitehaven, before in turn using the Whitehaven shares as collateral for subsequent loans.

Tinkler's Mulsanne Resources is also facing legal difficulties, with coal peer Blackwood Corporation seeking liquidators to recover $28.4 million from the mining magnate's flagship enterprise over failure to make payment for 94 million shares.

The Bull cites Patersons Securities analyst Matthew Trivett as saying Whitehaven shareholders could suffer acutely from a sudden share dump by Tinkler:

I think the short term losers will probably be shareholders in Whitehaven because more than 20 per cent of the company is at risk. If he has to have a firesale, he's got to find a group of people to take it off his hands at short notice and we all know what happens when people have to sell things in this type of market, they get held to ransom.

Image of Nathan Tinkler courtesy of NBN Television via Youtube