Receivers take charge at Quintis

Three partners of McGrathNicol have formally taken control of sandalwood producer Quintis and its Australian subsidiaries after being appointed as receivers and managers today.

The company’s secured bondholders, led by US group BlackRock, have appointed Jason Preston, Shaun Fraser and Robert Brauer of McGrathNicol as receivers and managers.

“The receivers will maintain the operations of the company whilst they evaluate restructuring and sale alternatives including a potential recapitalisation of the business with bondholder support,” McGrathNicol said in a statement.

“The bondholders have expressed a desire to work with stakeholders during the process to find a suitable outcome.”

The Australian subsidiaries include Albany-based sandalwood oil producer Mt Romance Australia, along with Sandalwood Properties, which is the responsible entity (RE) for the company’s 16 sandalwood projects.

Quintis has previously disclosed that Sandalwood Properties was in breach of its obligations under the Corporations Act and that the Australian Securities and Investments Commission was evaluating its continued fitness to hold its RE licence.

A group of Quintis growers (aka investors) has called a meeting for next Tuesday, where they will call for a vote to replace Sandalwood Properties as the RE of the 2002 sandalwood scheme.

This group is working with Sydney-based Huntley Group as a replacement RE.

Separately, Fremantle-based Primary Securities has written to growers in the 2003 to 2009 schemes advocating its capabilities as a new RE for those schemes.

The receivers were appointed three days after the directors of Quintis appointed Richard Tucker, Scott Langdon and John Bumbak of KordaMentha as voluntary administrators.

McGrathNicol confirmed that $US20 million raised last year from the sale of notes to certain bondholders was expected to be sufficient to fund operations whilst its review process is undertaken.

The receivers said they would communicate directly with key stakeholders over the coming days.

Meanwhile, Quintis founder Frank Wilson has written to growers, promoting the recently formed Sandalwood Growers Cooperative, of which he is a director.

“This organisation can in my view provide a superior management service and most importantly provide a better commercial outcome for all of us as growers, and enable us to both preserve and enhance the value of our highly valuable sandalwood assets,” Mr Wilson wrote.

He said he had been working with other major growers over the past six months to form a commercially superior alternative to Quintis, that could offer quality forestry management services at a lower cost to growers, and also provide superior sales and marketing services.

This was in parallel with attempts by Mr Wilson’s consortium to purchase the business.

His letter disclosed that the ‘Steynton’ consortium included five other major Quintis shareholders, all of whom were in the top 20 and three of whom were founding directors.