AFR
Quintis writes down value of Indian sandalwood plantations by $300m
- Nov 14 2017 at 8:16 PM
- Updated Nov 14 2017 at 8:16 PM
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Quintis has finally filed its annual accounts but its shares remain suspended. Ralph Bestic
Troubled grower Quintis has written down the value of its vast Indian sandalwood plantations by more than $300 million in the first comprehensive update on the company's financials since its war with short sellers.
ASIC has sent Quintis seven notices to produce documents, with which it says it has cooperated, and directors and certain key managers will appear before ASIC "for examination".
Quintis has taken a scorched earth approach to its books as it clings on to hope of a recapitalisation. Its shares have not traded since May, and bondholders missed out on their interest payment due in August. On Tuesday, Quintis secured a $20 million high-interest financing facility.
The former TFS posted a statutory loss of $416.8 million for 2016-17, from a profit of $90.1 million, including the impact of $307.4 million of pre-tax impairments related to its plantations, and $154.7 million linked to its Santalis division. Santalis investigates clinical uses for sandalwood oil and was
the counterparty to the terminated Galderma supply contract, which exposed a disclosure failure within the company.
That leaves Quintis with plantation interests valued at $342.8 million, down from $623.2 million, not including any trees managed on behalf of external investors. Underpinning the writedown is a lower estimated heartwood yield, referring to the prized part of the sandalwood tree; lower projected oil content; and a higher discount rate input of up to 17 per cent from as low as 12 per cent previously.
It owns 3,228 hectares and oversees 12,912 making it the world's largest sandalwood gower.
A massive drop in plantation sales worsened the company's liquidity position with revenue from services (including establishment fees) falling to $52.9 million from $150.1 million. As its problems mounted, the company failed to sell any plantations in the fourth quarter, which is seasonally its most important period.
It will hold its annual meeting in Perth on December 15.
The accounts released on Tuesday were approved by auditor Ernst & Young's Perth office.
Meanwhile, Quintis is the target of
a shareholder class action in the Federal Court, and is pursuing its founder and former
managing director Frank Wilson over unpaid interest on loans financing his personal plantation holdings.
The company undertook its fourth annual harvest in June this year, of 81 acres, which yielded a below-target 140 tonnes of heartwood.
