By Chris Thomson | posted on January 25, 2018
A RECENT purchase by Albany’s Mount Romance sandalwood plant of a $3 million cache of wood has failed to stop the subsidiary that runs it, and parent company Quintis Ltd, going into voluntary administration.
On Saturday, Quintis revealed that US hedge fund Asia Pacific Investments DAC had exercised an option to require Quintis to buy 400 hectares of plantations at a price of $37 million. Settlement of the payment was required to occur on February 2, and Quintis has said it could not afford that.
Company directors have now appointed KordaMentha as voluntary administrator of Quintis and its seven Australian subsidiaries, which include Mount Romance Australia Pty Ltd and Mount Romance Holdings Pty Ltd.
Just north of Albany’s urban fringe, Mount Romance Australia runs a sandalwood plant whose restaurant, high-end showroom and harmonious gongs are major tourist drawcards for the Great Southern region.
Quintis’ liquidity issues had seen it mired in a self-imposed trading halt since May.
Company chairman Dalton Gooding said he was “very disappointed” the company had gone into administration “given the huge efforts made over the last nine months to recapitalise the company in order to deliver its sustainable future”.
On January 12, Quintis announced Mount Romance Australia had secured 38.1 tonnes of Indian sandalwood.
The subsidiary was to have paid $3,009,900, exclusive of GST, for the wood, and had outbid other Australian and Indian sandalwood businesses.
Most of the wood was to have been transported to Mount Romance.
Once processed, it would have been supplied to the sandalwood oil market that produces fragrances, cosmetics, toiletries, and Indian consumer products.
Perth-based Quintis is the world’s largest owner and manager of commercial Indian sandalwood plantations.
The 60,000sqm Mount Romance plant is the world’s largest distiller of sandalwood oil.
In November, a non-binding agreement for potential recapitalisation of Quintis was signed by most existing holders of the company’s senior secured notes, potential new investors, and the company.
But the new investors and noteholders could not agree on final terms.
At the same time, the noteholders and Quintis were discussing an alternative recapitalisation plan to a separate consortium of potential investors that included company founder, and former managing director, Frank Wilson.
