Sydney - The horse breeding and racing company owned by Australian mining mogul Nathan Tinkler will sell hundreds more of its horses and shut down a key stable to cut costs, a further sign of financial trouble in the embattled entrepreneur's empire.
Patinack Farm, Australia's largest thoroughbred racing and stud operation, said on Friday it plans to reduce headcount to as low as 800 from 1 300 as part of a sweeping review of the business - a move which follows the sale of 350 of its horses at knock-down prices earlier this month.
Tinkler, a former coal mining electrician who made a billion dollar fortune from a A$1m bet on a coal deposit, has become a symbol of wider woes in the Australian mining industry as it tries to deal with a drop-off in demand from major export market China after a decade-long boom.
The 36-year-old's wealth has dwindled in line with falling coal prices and creditors are circling his mining, sports and horse racing empire.
The intensely private tycoon, who recently moved to Singapore, has managed to avoid public hearings over a series of multimillion dollar lawsuits brought by creditors in recent weeks by reaching last minute out-of-court settlements.
The downsizing of loss-making Patinack comes ahead of a key week in the courts with two more creditors threatening to proceed with legal action if payments totalling around A$28.5m are not made.
Coal explorer Blackwood Corp Ltd is demanding payment from unit Mulsanne Resources and security firm Internet Fraud Watchdog is demanding payment from Tinkler Group Holdings.
Two sources with knowledge of the lawsuits told Reuters that Tinkler is awaiting funds from offshore to pay off those debts. They declined to be identified as the matters were before the courts.
Tinkler also faces some other smaller cases that have yet to be resolved.
Most of Tinkler's wealth is tied up in a heavily leveraged stake in Australia's largest independent coal miner, Whitehaven Coal. The value of that 19.4% holding has slumped to around A$600m from A$1.1bn at its peak.
Tinkler this month failed to convince others to join a drive to oust Whitehaven's chairman and independent directors, whom he blames for a halving of the company's share price since April, when it acquired Tinkler's Aston Resources.
A bold A$5.3bn bid in June to take Whitehaven private fell apart after Tinkler failed to bring sufficient equity investors on board, sources with direct knowledge of the deal told Reuters at the time.
Under Australian takeover rules, the tycoon, who has denied interview requests since the Whitehaven board meeting, c an make another approach in January but it remains unclear if he will.
Tinkler, who had long held a dream to make it big in the "sport of kings", splashed out more than A$300m since 2007 to build Patinack, including A$19m on 59 horses at one sale in 2008.
The plan to close its Melbourne stable and hold further auctions is unlikely to recoup anywhere near the money Tinkler has paid out in the purchases and for the upkeep of the horses.
Australian media has previously reported that he tried to offload his entire racing business at a loss to a Qatari sheikh.
Racing Queensland Ltd said this week that Patinack had handed over prize money to pay debts while Racing Victoria forced Tinkler to pay more than A$1 million in outstanding monies before allowing his horse to race in the highly regarded Caulfield Cup earlier this month.
"All Too Hard" went on to win the race, earning almost the equivalent of the debt.
Patinack Farm trainer John Thompson said in a recent radio interview that the operation had been surviving on prize money.
"I have gone weeks without farriers, bedding, run out of feed a number of times," Thompson said.
"It's a cash flow problem," he added. "Nathan is obviously very wealthy but it's all paper sort of value."