01/05/2017 - 14:41

Quintis renegotiates $34m acquisition

01/05/2017 - 14:41

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Sandalwood producer Quintis has negotiated a second deferral of an option agreement that could see it having to pay nearly $34 million to buy back 400 hectares of plantations, as the company confirmed it was in advanced negotiations with a possible replacement for a key Chinese customer.

Quintis renegotiates $34m acquisition

Sandalwood producer Quintis has negotiated a second deferral of an option agreement that could see it having to pay nearly $34 million to buy back 400 hectares of plantations, as the company confirmed it was in advanced negotiations with a possible replacement for a key Chinese customer.

Perth-based Quintis, which suffered a dramatic fall in its share price in March after a damning report in the company’s operation by activist investment group Glaucus, said it had renegotiated the plantation acquisition with the undisclosed seller.

If the seller excerises its option to sell the plantations in July then no change to the $33.9 million acquisition price will be made.

However, if the seller instead exercises an option to sell the plantation in December, then Quintis will incur a 6.25 per cent interest hit.

If neither option is exercised, the seller will have the option to sell the plantation any time before the end of December next year for $US34 million, but only following a change of control transaction.

Quintis also said in a statement today that it had selected a preferred Chinese offtake counterparty for 150 tonnes of sandalwood, after Shanghai Richer Link failed to place its expected order earlier this year.

“However no final sales agrteement has yet been signed,” Quintis said.

“These negotiations have confirmed Quintis’s confidence that there is a substantial market for Indian sandalwood from a range of buyers in the China market.”

Former BHP Billiton executive Julius Matthys was named interim chief executive of Quintis after Frank Wilson resigned to plot a takeover of the company.

Quintis shares were 5 per cent lower to $1.14 each at the close of trade.

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