Sandalwood plantation owner Qintis has missed an interest payment on its senior secured notes, which was due to be paid on August 1.

In a statement to the Australian Securities Exchange last week, Qintis said it had until August 30 to either make the US$10.9 million payment or receive a waiver to prevent an event of default under the indenture governing the notes.

The company issued US$250 million of senior unsecured notes in July last year with a coupon of 8.75 per cent.

Qintis is short of cash, has extensive liabilities and there are question marks over it ability to sell its sandalwood products.

Its stock was suspended from trading on May 17, allowing the company to “review its operations and outlook.” At the end of June it said it was in discussions with several parties about debt and equity transactions that would recapitalise the company.

Qintis’s earnings have been under a cloud because its biggest buyer, Shanghai Richer Link, has not placed orders this year. Last year it lost another big customer, Nestle subsidiary Galderma.

And it has been the subject of critical commentary by a hedge fund manager, Glaucus Investments, saying its structure is unstable and displays “ponzi-like” elements. It has an unusual structure, including put options that allow investors to force the company to buy back part of their land holdings.

The company has rejected this the Glaucus criticisms, saying that only 10 per cent of its revenue comes from plantation sales and ongoing plantataion management fees, and that it is an established sandalwood oil and wood products supplier.

Meanwhile, the ratings agencies Moody’s and S&P have issued a number of downgrades. In the latest of these, on June 23 S&P downgraded the company’s credit rating and senior secured debt rating from CCC+ to CCC- and placed the company on credit watch, with negative implications.