Quintis holders extend forbearance, cut cash balance requirements

By Susanna Moon

Chicago, Nov. 3 – Quintis Ltd. secured another extension of some deadlines under the forbearance agreement for its 8¾% senior secured notes, this time until Nov. 10.

Also, a majority of noteholders has agreed to amend the terms to reduce the minimum aggregate cash balance to A$10 million, less any payments made for a put option as agreed by a majority of noteholders, according to a company update on Friday.

The amount was originally set at A$18 million and reduced to A$13 million on Sept. 21.

The minimum aggregate cash balance amount is required under the waiver related to the company’s failure to provide on time its financial statements for the March 31 quarter.

As previously reported, the company entered into the forbearance agreement with a majority of the noteholders after it failed to make the $10.9 million interest payment due on the notes on Aug. 1. The noteholders agreed to forbear from taking enforcement action related to the default arising from the missed interest payment until March 1, 2018.

Additionally, the noteholders agreed to forbear from taking action over Quintis’ failure to provide its financial statements for the quarter ended March 31 by the May 30 deadline.

With the latest extension, the company now has until Nov. 10 to

• Agree to a recapitalization plan applicable to it on terms acceptable to a majority of noteholders;

• Agree to terms acceptable to a majority of noteholders with Asia Pacific Investments DAC to waive or defer the put option that enables Asia Pacific Investments to sell 400 hectares of plantations to the company at a predetermined price; and

• Agree to terms acceptable to a majority of noteholders to the contracts under which the company sold part of its loan book in 2016.

This deadline was originally Sept. 15. It was previously extended to Sept. 22, Sept. 29, Oct. 13 and Oct. 27.

During the forbearance period, interest continues to accrue on the notes, including interest on the interest payment that was due on Aug. 1.

The company said it is continuing discussions with a number of parties about a recapitalization. The recapitalization, if implemented, will be subject to shareholder and regulatory approvals, due diligence and other conditions precedent. The company gave no guarantee that the recapitalization will be completed.

Under the terms of the notes, the company must provide annual financial statements to the noteholders within 120 days of the end of the fiscal year. As of Oct. 30, the company had not finalized its financial statements for the year ended June 30.

Failing to provide the annual financial statements by the deadline will only constitute an event of default if the trustee or a requisite number of noteholders declares a default and the company does not cure the default within 30 days. As of Oct. 30, the company had not received a default notification from the trustee.

Quintis is a Perth, Australia producer of sandalwood.

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