Sandalwood company Quintis collapses for second time in six years with FTI Consulting called in to clean up

The world’s biggest Indian sandalwood grower has collapsed for the second time in six years, with receivers from FTI Consulting put into the privately owned WA company Quintis. FTI said on Tuesday it had taken control of group flagship Quintis (Australia), as well as its operating and funding subsidiaries - Sandalwood Properties, Quintis Forestry, Arwon Finance, Quintis Leasing, Fieldpark, Mt Romance Holdings, Quintis Sandalwood and About Time We Met. The failure threatens up to 150 jobs in Albany, Kununurra and Perth, and an estimated $230 million in upfront fees paid by investors in Quintis’ managed investment schemes. “As a result of their appointment, the receivers are now in control of the majority of the companies’ businesses, operations and assets,” FTI said. The appointments include sandalwood plantations and land in the Kimberley and North Queensland, Quintis’ operations centre in Kununurra and the Mt Romance oil distillation facility and shop near Albany. FTI said the receivers would call for expressions of interest in the sale and/or recapitalisation of Quintis while urgently assessing the future viability of the group companies. Quintis spans 3.5 million sandalwood trees on more than 9000ha of land, divided almost equally between its managed investment schemes growing trees on leased land, institutional and high-net worth investors using the company to grow and market trees, and plantations owned by Quintis. Owner-investors will now have to decide whether to try and harvest the trees themselves, or wipe off their long-term investments. Quintis had been under stress for several months, having moved in December to wind up all of its 10 management investment schemes on independent advice most would not generate returns for investors. Management has struggled to build demand for sandalwood, which is harvested for its aromatic wood and the essential oil that is used in perfumes, cosmetics and medicine. The company has also laboured financially, hurt by COVID-19 restrictions and held back by weak sandalwood prices and China’s 2020 suspension of timber imports from Australia. Administrators from McGrathNicol and then receivers from KordaMentha were first sent into the then-ASX listed Quintis in January 2018 after the company was unable to meet a $37 million payment to a US fund manager. US bondholders led by global investment giant BlackRock later took control of Quintis via a $175m recapitalisation that preserved growers’ interests in the managed investment schemes but torched the group’s 7500 shareholders. Planted alongside host trees that sustain them, it can take more than 15 years before sandalwood trees are ready to be harvested. Quintis started life as TFS in 1997 during the boom in tax-effective managed investment schemes, planting its first trees in the Ord irrigation area in Kununurra in 1999 before broadening its reach interstate and into the US and buying Mt Romance.