Administrators recommend winding up Quintis Leasing

Administrators handling Quintis Leasing’s administration have recommended winding up the company after receiving almost 30 bites during an expression of interest period.

Quintis Leasing is the lease holding entity within the wider Quintis Group, which owns the world’s largest sandalwood plantation stretching across 12,000 hectares.

One of the group’s entities- Sandalwood Property Limited - moved to wind-up 10 plantation investment schemes it is responsible for in December, after the schemes were found not to be financially viable and would cost investors more than $30 million to conclude.  

The winding-up applications for the schemes- not the corporate entity itself- forced the overarching group to withdraw its financial support for Quintis Leasing.

That move was expected to result in Quintis Leasing entering administration, which occurred on December 20 when the subsidiary appointed Richard Tucker and Scott Kershaw from KordaMentha.

During an expression of interest period, 27 EOIs were lobbed, six non-disclosure agreements were made, and one indicative and non-binding deed of company arrangement term sheet was received, according to an administrators report to creditors dated February 27.

Under the terms of the DOCA bid, a total cash contribution of $100,000 would be paid and distributed to participating creditors. That amount would result in an estimated return of 34 cents in the dollar to participating creditors, the administrators report said.

The administrators said they believed the proposal lacked funding and clarity and was in their opinion not in the creditors’ interests to execute that DOCA.

And as a result, they said it was in the creditors' interest for the company to be wound up at the second creditors meeting.

But administrators said if a revised DOCA proposal was lobbed before second creditors meeting, it would be considered.

“It is clear at this stage that the company has a deficiency of assets to liabilities and is insolvent, in that it cannot meet its debts as and when they fall due,” the report said.

“In our view, the winding up of the company, appears to be the most viable option for creditors, as the liquidators will be in a position to wind up the company and realise their remaining assets for the benefit of creditors.”

Another court hearing for the winding-up application of the 10 schemes is set for April, of which the result would be taken into consideration by administrators.