Quintis will miss next interest payment to bondholders
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Quintis will miss its August 1 semi-annual payment to bondholders. Ralph Bestic
by Vesna Poljak
Quintis has confirmed the worst fears of bondholders and will miss its interest payment due on Tuesday after protracted negotiations around a recapitalisation failed to deliver a result in time.
The sandalwood group has not given up hope of a rescue and told the ASX on Monday that it is still in discussions with a view to reviving the business.
But the shares have not traded since May and Quintis has now set September 1 as its target for resuming trading. That is only if the former TFS can avoid collapse given its cash-strapped position, extensive liabilities and the market's loss of confidence in its business model.
Owners of Quintis bonds, issued in 2016, will not see their $US10.9 million ($13.7 million) interest payment on August 1.
The company has until the end of August to come up with the payment or obtain another waiver from its noteholders. The Perth-based group has already been excused from its obligations once, when it relied on a waiver to get out of filing its March quarter accounts. Without this, it would have defaulted on July 8.
Since its market value spiralled in May, Quintis has been running down its cash pile at an exhaustive pace.
But it has failed to tackle its somewhat unique liabilities, including extinguishing a live put option that entitles its holder to force the company to buy back 400 hectares of immature sandalwood trees for $33.9 million.
Deferring the put option was one of the terms bondholders demanded in exchange for the waiver tied to its failure to submit March accounts. That waiver expires on August 9.
In challenging Glaucus' claims, the company admitted that it had lost its biggest customer in China, amid a broader customs duty scandal linked to sandalwood imports. There was worse to come.
As Quintis struggled to contract a new buyer in China, despite its assertions that this was only a matter of time, it emerged that the company had lost Nestle's Galderma as an oil customer back in 2016.