The Tasmanian timber company Gunns has entered voluntary administration after losing the support of its bankers.
Gunns has told the stock market that it was relying on the support of its lenders to continue paying wages and meet debt repayments.
The lenders have informed the company they will not be extending more than $500 million worth of loans and Gunns is now in the process of appointing an administrator.
In August, Gunns reported a loss of almost $1 billion for the past financial year.
Shares have been in a trading halt for more than six months In its statement to the ASX, Gunns thanked its employees, past and present.
"The company is disappointed that it will not be able to pursue the restructuring transaction which it considers would have delivered a better outcome for the people who have a stake in the company's past and future," the statement said.
Shadforth Financial Group analyst Matthew Torenius says the administrator will determine whether Gunns can continue operating.
"If not, you're looking at a sale of assets and essentially a wind-up of the company," he said Mr Torenius says it may well be the end of the company "as we know it".
He says the company still has several existing assets such as softwood sawmills, plantation operations and the pulp mill project in Tasmania's Tamar Valley where site works have been continuing.
"That will be looked at by the administrators now.
I'd imagine they would either look at a program of refinancing the company, if that's possible, or selling off what remaining assets the company has." Mr Torenius believes shareholders will not see any returns if Gunns is liquidated.
"I think it's fair to say that shareholders have lost all their money that they've put into the company," Mr Torenius said.
'Sad day' The Tasmanian Premier, Lara Giddings, says it is a sad day but has warned people about dancing on Gunns' grave.
The company's demise has sparked political debate about the future of the controversial $2.3 billion pulp mill project which was touted as Tasmania's biggest infrastructure project.
The Greens MP and long-time Gunns detractor, Kim Booth was quick to link the announcement to the project.
"This is the final nail in the pulp mill coffin," he said.
But Lara Giddings says Gunns' demise does not spell the end of the project.
"I would say to people be very careful about dancing on the grave because the fact is the resource still exists, the proposal still exists," she said.
"This demise of this company, the unfortunate demise of this company, may in fact mean that other proponents come forward." Opposition Leader Will Hodgman blames Gunns' position on prolonged Greens campaigning.
"No doubt you will be celebrating long and hard at this news after decades of tearing the company down," Mr Hodgman said.
Mr Hodgman says it is terrible that the "once-great Tasmanian company" has ended up in this position.
Australian Greens Leader Christine Milne says Gunns' collapse means the pulp mill is dead.
"Lara Giddings is misleading the Tasmanian people and she should stop it," she said.
"It isn't good for those who wanted the pulp mill and it's not good for those that didnt want the pulp mill." The Forestry Union's Danny Murphy says workers at Gunns' hardwood processing facility in Launceston are shocked by the announcement.
He spoken to about 50 workers who were expecting to be made redundant when the plant closed on Friday.
"Basically we've been told very little, except for the company has been put into administration," he said.
"At this stage the company has given assurances that all employees entitlements for this Friday, that were due to be paid on this Friday, will be paid, and that hasn't changed." The timber mill at Bell Bay, which employs 120 people, will remain open.
End of an era Gunns started as a family-owned building and sawmilling business in Launceston in 1875.
By 1986 it was a publicly listed company, and 43-year-old John Gay was appointed managing director.
In 1999, Mr Gay spearheaded a massive expansion of Gunns, with the company taking over the assets of Boral in Tasmania and the state's biggest woodchip company, North Forest Products.
By 2004 Gunns employed about 1,200 people, was worth about $1 billion and had a share price of $4.46.
In the same year, the company announced plans for the $2.3 billion pulp mill in the Tamar Valley.