‘Billionaire’ Clive Palmer down to his last $2m

There is a real risk Clive Palmer will not be able to repay an interim $US10.7m ($14m) payment from China’s Citic.

Clive Palmer.

There is a real risk Clive Palmer will not be able to repay an interim $US10.7 million ($14m) payment from Chinese giant Citic, according to a West Australian court, ­reinforcing the financial frailty of the self-proclaimed billionaire and former MP.

The reasons from the Court of Appeal, released late on Wednesday, noted that Mr Palmer’s key corporate vehicle, Mineralogy, had less than $2m in cash and shares to its name and was likely to spend any interim payment it received from Citic before the ongoing legal battles were ­resolved.

Citic secured a stay from the court in January that excuses it from handing over $US10.7m to Mr Palmer until an appeal is heard.

The court found there were legitimate concerns that any money paid by Citic to Mr Palmer may not be recovered if Citic succeeds in its appeal next month.

The court cited evidence showing that Mineralogy was told by various banks that it could not borrow against its assets, and that Mr Palmer’s other business were reliant on financial support from Mineralogy.

Among the Palmer companies reliant on Mineralogy for cash was Fairway Coal, which late last year flagged plans to build an open-cut coalmine on Mr Palmer’s Mamelon cattle station in Queensland.

The judgment revealed that Mineralogy recorded a $5m loss during the 2016 financial year and had just $1.943m in cash, debtors and publicly traded shares to its name at the end of June.

The fig­ures show there has been little­ improvement in Mineralogy’s finances over the past year despite the company collecting several million dollars in royalties from Citic’s $10 billion Sino Iron project in Western Australia. Mineralogy’s cash holdings had dwindled to just $491,899 in 2015 in the lead-up to the financial collapse of Mr Palmer’s Queensland Nickel.

“The conclusion that there was a real risk that, if the stay were not granted, and the money were paid, the Citic Parties would be unable to recover the money following a successful appeal was confirmed by, but not dependent upon, the fact that Mineralogy had not undertaken not to dispose of or ­divest any money paid to it pending the determination of the ­appeal,” the reasons said.

“To the contrary, it appeared there was a strong likelihood that any money received by Mineralogy prior to the determination of the appeal would be transferred elsewhere within the Palmer Group Companies and expended.”

The $US10.7m payment is part of an interim order that will ­deliver some proceeds to Mr Palmer while he and Citic face off in court over another disputed royalty out of Sino Iron.

That so-called Royalty B payment could be worth hundreds of millions of dollars a year to Mr Palmer if he is successful.