Embattled coal entrepreneur Nathan Tinkler has signed an agreement to clear his debt to junior miner Blackwood Corporation but investors seem to have taken a wait-and-see approach on the deal.

Blackwood shares sat unchanged at five cents after the company announced it had signed a deed of settlement and release with Mr Tinkler over a $28.4 million owed by his Mulsanne Resources.

Under the agreement, Mr Tinkler’s companies will pay Blackwood $12 million to settle the debt, owed for a one-third stake in Blackwood that Mr Tinkler’s Mulsanne Resources failed to take up.

The arrangement would leave Mr Tinkler with no shares in Blackwood, ending uncertainty over ownership of the stake.

Blackwood forced Mr Tinkler’s Mulsanne Resources into liquidation in 2012 after Mulsanne failed to pay for the share placement.

The company has now suspended legal action, comprising an application to freeze Mr Tinkler’s assets and insolvent trading charges, until a June 30 payment deadline.

In a statement, the Tinkler Group said it was “pleased to have agreed to settle this matter to each side’s satisfaction”.

“We look forward to fulfilling the agreement over the next month,” the statement said.

A spokesman for Blackwood said the deed provided “a road map to settlement”.

Companies owned by Mr Tinkler and his family trust have given undertakings that certain assets will be sold and, if sale proceeds reach $12 million, the money will be handed to Blackwood.

If payment is made by June 30, Blackwood will end its legal action against Mr Tinkler, and Mr Tinkler will walk away with no shares in Blackwood.

If the deadline is not met, Blackwood said it would resume its legal action.

Mr Tinkler faced a liquidators’ examination into the state of his assets in the NSW Supreme court in March.

In May, the liquidators applied to freeze Mr Tinkler’s assets and those of his wife, as trustee of the Tinkler Family Trust, while legal action against Mr Tinkler and Mulsanne’s directors for alleged insolvent trading was continuing.

No indication has been given as to which assets Tinkler companies may sell to raise money.

Mr Tinkler has been selling assets including his horse racing interests and real estate.