14/11/2017 - 15:28

Quintis receives $US20m lifeline

14/11/2017 - 15:28

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Embattled sandalwood producer Quintis has been thrown a lifeline after entering into a high-interest debt facility for up to $US20 million ($15 million), while also announcing a net loss after tax of $416.8 million for the year to June 2017.

Quintis receives $US20m lifeline

Embattled sandalwood producer Quintis has been thrown a lifeline after entering into a high-interest debt facility for up to $US20 million ($15 million), while also announcing a net loss after tax of $416.8 million for the year to June 2017.

Shares in Perth-based Quintis have been suspended since May while it continues discussions with a number of parties over potential debt and equity transactions to recapitalise the business.

The company will enter into a note agreement with existing lenders that will allow it to issue up to $US15 million of series A notes and $US5 million series B notes.

Both series will carry a 12 per cent interest rate, and there will be a 5 per cent establishment fee.

They have a maturity of just six months, expiring on May 15 2018, and the interest can be capitalised at maturity or when a recapitalisation occurs.

In a statement, the company said it was still attempting to recapitalise.

“The proceeds from the notes will be used to fund Quintis’s operations as the company works to secure a recapitalisation,” Quintis said.

“The company is continuing discussions in relation to a recapitalisation.

“The recapitalisation, if implemented, will be subject to all necessary shareholder, creditor and regulatory approvals, due diligence and other conditions precedent.

“The discussions are well progressed but no binding agreements have been entered into and there is no guarantee that the recapitalisation will be completed in this form or another form.”

Quintis also announced a $416.8 million after tax loss in its annual report, citing three key reasons for the losses.

There was a non-cash reduction to the company's biological assets of $307.4 million, taking the value of Quintis' owned plantations to $342.8 million.

Another contributing factor was a non-cash impairment of goodwill and intangible assets of $154.7 million, primarliy due to $134.5 million impairment from the company's pharmaceutical division, Santalis.

A drop in revenue of $97.4 million, mainly from a fall in services revenue, was the other key factor.

"The company recorded no sales of plantation investment products in the fourth quarter of the financial year. the period in which, historically, the majority of such plantation sales have been completed," Quintis said.

 The directors prepared the annual report on a going concern basis and believes the company will continue to receieve ongoing support from its lenders.

The annual report also mentioned Quintis' ongoing attempts to recapitalise.

"The recapitalisation currently being contemplated involves a combination of a capital injection, amendments to existing debt facilities and limited working capital facilities," the company said.

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