Timber company Gunns has revealed to the market it is in the process of appointing a voluntary administrator.
Gunns says its lenders have informed the company they will not be extending loans to keep the company operational.
“The company now regretfully advises that the lender group has informed the company that the lenders will not permit the company to retain further funds, which are necessary to meet the operational and working capital requirements of the business,” the group said in a statement.
“As a result, the company is unable to continue trading and the directors are in the process of appointing an administrator.
“That appointment is expected to be made shortly.”
The company said in the statement it was disappointed it wouldn’t be able to pursue a restructure process on its own terms, which it claims would have provided a better result.
“The company is very grateful to all those people, especially employees, past and present, who worked hard to support the company’s strategy,” it said.
“This is a disappointment for them and those associated with the restructure of Gunns business to a plantation-based manufacturing industry in Tasmania.”
The business has been in trouble for some time. Earlier this year the company reported a $904 million loss for the 2011-12 year.
The company has also suffered massive writedowns for its forestry assets, and had been attempting to raise hundreds of millions in order to pay down its debt.
Shares last traded at 16 cents.
This article was first published on LeadingCompany’s sister site, SmartCompany.