27/02/2018 - 15:40

Quintis receivers expecting offers next month

27/02/2018 - 15:40

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The receivers of Quintis have sought to retain full control of the sandalwood producer, appointing Primary Securities as an independent consultant and arguing that plans by growers to take control of some forestry schemes would be counterproductive.

McGrathNicol's Shaun Fraser speaking to growers last month. Photo: Attila Csaszar

The receivers of Quintis have sought to retain full control of the sandalwood producer, appointing Primary Securities as an independent consultant and arguing that plans by growers to take control of some forestry schemes would be counterproductive.

In an update released today, the receivers said they expected to receive non-binding indicative offers for the group by March 23.

They said summary information packs had been sent to 70 interested parties, with more detailed information available to parties who had signed a confidentiality agreement.

Short-listed bidders would have a period of due diligence after March 23.

The receivers did not specify a target date for completing a sale but noted that the timeframe for a second meeting of creditors had been extended to May 31, which aligned with their sale process.

McGrathNicol’s Jason Preston, Shaun Fraser and Robert Brauer were appointed receivers and managers of Quintis on January 23.

They said operations had continued as normal but noted 15 staff (or 7 per cent of the company’s workforce) had been made redundant earlier this month.

Plans by the receivers to continue managing all of Quintis’s sandalwood projects and to continue operating the ‘responsible entity’ for the investment schemes has put them at odds with the Sandalwood Growers Cooperative.

The co-op, which counts Quintis founder Frank Wilson as a director, wants to replace Quintis subsidiary Sandalwood Properties with Sydney-based Huntley Management as the responsible entity for some schemes.

A vote on this resolution was due to be taken at a growers’ meeting yesterday, but co-op chairman Teague Czislowski said it had been postponed to March 12 – the third time this has happened.

In addition, some growers want to terminate the lease and management agreements with Quintis and appoint the co-op as the new manager of certain schemes.

Mr Wilson and other growers believe the co-op is better able to manage the schemes and deliver the best possible return to growers.

The receivers said today they considered that both the notices of termination and the resolution to appoint a new manager were invalid.

“Further, a termination of the LMAs would result in the termination of the growers’ leases and a forfeiture of the growers’ trees, which would not be in growers’ best interests,” they said.

The receivers added they are well funded and that Quintis will continue to maintain the plantations during the receivership.

“By maintaining the key assets of the business and retaining grower support, the receivers expect the sale process will see Quintis emerge from receivership and voluntary administration with the schemes well placed to achieve a favourable outcome for growers,” they said.

In a related move, the receivers said Fremantle-based Primary Securities had been appointed as an independent consultant to Sandalwood Properties, in order to provide growers with greater transparency.

Primary will review the operations and performance of Sandalwood Properties, in regard to leases and payment of rent, water entitlements, oversight of marketing and the sale of harvested timber, preparation of financial statements and compliance reports, and plantation management.

As Business News reported last month, Primary had been seeking to position itself as an alternative responsible entity for the Quintis schemes.

That put Primary at odds with the co-op’s plan to appoint Huntley.

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