Customer offers lifeline to struggling Quintis
Quintis is an Australian ASX-listed company that grows sandalwood.
Sandalwood plantation marketing company Quintis, which is under siege by short-selling US hedge fund Glaucus, may have found a replacement for a key Chinese customer.
Graeme Scott, a Quintis shareholder, has formed a joint venture with Shenzhen-listed Layn Natural Ingredients to buy 150 tonnes a year of sandalwood for the Chinese market.
Last month, Quintis, formerly known as TFS, was forced to reveal its biggest customer, Shanghai Richer Link, had failed to place an order so far this year after Glaucus criticised the Chinese company as insubstantial in a scathing research report.
Shanghai Richer Link agreed last year to buy 150 tonnes a year of sandalwood a year for five years, but has placed and paid for only one shipment.
Quintis stock tumbled following publication of the Glaucus report on March 22, dipping as much as 20 per cent during the day. The stock remains heavily shorted.
In a statement to the Shenzhen Stock Exchange on Thursday, Layn, which makes herbal extracts for the food and healthcare industries, said it had entered into a 50-50 joint venture with Mr Scott to be named Shanghai Authentic Sandalwood Co.
Under the terms of the agreement, each side is to contribute $4 million to fund the company.
