Rich list members Travers Duncan, Brian Flannery and John Kinghorn are set to cash in on one of the best mining deals in some time, selling two coal deposits in New South Wales for $500 million, just a year after they secured the deposits for about $1 million.
Duncan, Flannery and Kinghorn each own 12.02% of Cascade Coal, the company that owns the two coal deposits.
Other investors include John McGuigan and John Atkinson, who invested alongside Kinghorn in the collapsed donut chain Krispy Kreme. They also own stakes of 12.02% each.
But the five men also have something else in common – they are all directors of mining company White Energy, which is also the company acquiring Cascade Coal’s deposits.
Given the nature of the deal – which at this stage gives White Energy an option to acquire Cascade Coal in the next 28 days – and the relationships involved, White Energy has formed an independent board committee to approve the deal.
The committee has already engaged financial and legal advisers, and will bring in an independent expert to value the company should the independent board members decide to proceed with the deal.
Under the terms of the deal, White Energy will pay Cascade a maximum of $41 million in cash and the remainder in White Energy shares.
This will be Duncan and Flannery’s second big coal deal in two years.
The pair were formerly directors and major shareholders of coal company Felix Resources, and took a combined $1 billion when the company was sold last year.
Duncan was listed on the BRW Rich 200 in May with a fortune of $585 million, while Flannery was listed with a $588 million fortune.
Kinghorn was listed on the rich list with a fortune of $398 million.
However, the RAMS Home Loan founder has had a difficult year, most notably with Krispy Kreme, which collapsed last month.
Kinghorn has been acting a financier for the struggling chain for some months, and is hoping a plan to restructure the business and close stores will be successful.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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