Former billionaire Nathan Tinkler has paid a $12 million bill to coal explorer Blackwood allowing him to avoid moves to freeze his assets.

Blackwood released a statement on Thursday saying that Mr Tinkler had made the payment, ahead of an agreed deadline on Sunday.

It allowed Mr Tinkler to settle a $28.4 million share placement debt with Blackwood that he never paid for, but leaves him with no stake in the company.

Blackwood will also drop an application to freeze assets belonging to Mr Tinkler, his wife and family trust and his company Mulsanne Resources – which is now in liquidation – for insolvent trading.

The payment comes a week after the heavily indebted entrepreneur was forced to give up his main asset, a stake in Whitehaven Coal that he sold for $600 million to his lenders including US fund Farallon.

It is believed that sale did not wipe out all of the 37-year-old former electrician’s debt and he still had Australian properties and a private jet and helicopter for sale.

Shares in Blackwood, which owns coal tenements in Queensland, were unchanged at five cents.