Quintis gets waiver from noteholders after missing reporting deadline

By Angela McDaniels

Tacoma, Wash., July 10 – Quintis Ltd. has received a waiver from a majority of holders of its senior secured notes, according to a company news release.

As previously reported, the company failed to provide its financial statements for the quarter ended March 31 by the May 30 deadline under the terms of the notes. It was required to either publish the statements or receive a waiver of the reporting default by July 8.

Because the waiver has been received, the company is not required to publish the quarterly statements.

As part of the waiver, a majority of the noteholders and Quintis have agreed to a number of conditions that include the following:

• The Quintis group will not incur any additional debt without the approval of a majority of the noteholders;

• The Quintis group is required to hold a minimum aggregate cash balance of A$18 million, less any payments made with respect to a put option as agreed to by a majority of noteholders;

• Without prior written consent of a majority of noteholders, members of the Quintis group will not make any payment or transfer collateral to the institutional plantation owner that possesses a put option. Under the terms of the put option, the investor is able to sell 400 hectares of plantations to the company at a predetermined price;

• Terms for a waiver or deferral of payments to the institutional plantation owner that are acceptable to a majority of the noteholders will be agreed to by the parties by July 30;

• Amendments will be made by July 30 to certain provisions in the contracts under which the company sold part of its loan book in 2016; and

• The terms of the notes enabled one or more permitted holders – namely Quintis’ former managing director, Frank Wilson – to complete a change-of-control transaction without triggering the accelerated payout of the notes that applied to all other parties seeking a similar change-of-control transaction. This provision has been removed.

As of July 4, the company remains in discussions with more than one party about potential debt and equity transactions that would recapitalize the company.

According to a June 22 news release from the company, the delay in publishing the quarterly statements is due to a number of developments including potential equity and debt transactions, volatile market conditions, a sharp decline in the company’s share price, resignation of the company’s managing director, a review of the company’s operations, lower-than-expected sales of sandalwood products to China because of delays in signing a contract, a receivable that is not now expected to be collected and other issues.

Quintis is a Perth, Australia producer of sandalwood.

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