By Chris Thomson | posted on June 7, 2018
RECEIVERS have floated a plan they say will save all 221 jobs at floundering company Quintis that owns Albany’s Mt Romance sandalwood factory, and provide a better return for unsecured creditors than available under a liquidation scenario.
McGrathNicol partners Jason Preston, Shaun Fraser and Robert Brauer – who in January were appointed receivers of Quintis – have proposed to voluntary administrator KordaMentha an arrangement the three men say would inject between A$125 million and A$175 million of new cash into the business to fund long-term operations.
The McGrathNicol partners say the arrangement is supported by Quintis’ secured creditors.
An additional $20 million has been made available for ongoing operations while the receivership is concluded.
The partners say the plan would mean Quintis’ 221 workers – which includes staff at Mt Romance – would retain their jobs.
The men said the plan would see workers made redundant in the early stages of the receivership have their entitlements paid in full.
In March, a McGrathNicol spokeswoman told The Weekender none of the redundancies would be at the Mt Romance factory (‘Sandalwood jobs axe misses Mt Romance’, March 1).
The partners said the plan would see Quintis emerge as a private company in a “very strong” financial position.
“Under the proposal, Quintis’ bond holders will recapitalise and acquire control of the subsidiaries of Quintis Limited and the entirety of the group’s business and assets,” the men advised.
“The proposal represents a very favourable outcome for growers, employees and creditors as it preserves Quintis’ vertically integrated business model.”
The partners said the plan would immediately make funds available to provide a return to unsecured creditors that would be better than achievable if a liquidation were to occur.
A meeting of creditors to be held tomorrow will consider a recommendation from KordaMentha that the McGrathNicol plan be accepted.
The partners advised that if creditors approve the plan, recapitalisation would likely be completed by August 31.
Perth-based Quintis is the world’s largest owner and manager of commercial Indian sandalwood plantations.
The 60,000sqm Mt Romance plant on Albany’s northern outskirts is the world’s largest distiller of sandalwood oil.