Sandalwood company Quintis directors have called in administrators after it was forced to confess it didn’t have to funds to buyback plantations under a put option valued at $37 million.
Shares in Quintis have not traded since May and the company decided at the weekend to appoint KordaMentha as administrators.
It is also expected that the McGrathNicol firm will be appointed as receivers in a matter of days.
In a statement on Sunday night, Quintis said on January 19, Asia Pacific Investments, owned by hedge fund Davidson Kempner exercised an option for Quintis to buy back 400 hectares of plantations for $37 million.
Quintis owns and manages more than 12,000 hectares of Indian sandalwood plantations across northern Australia.
Quintis said it did not have the money to pay the option price.
The statement said "the purpose of the voluntary administration is to protect the interests of shareholders, creditors, employees, suppliers, growers and other stakeholders" and "the company understands that the receivers will further evaluate restructuring and sale alternatives, including a potential recapitalisation of the business".
"We are very disappointed with this outcome given the huge efforts made over the last nine months to recapitalise the company in order to delivers its sustainable future," chairman Dalton Gooding said in the statement.