The collapse puts 600 jobs at risk and could spell the end of the company’s controversial plans for a huge pulp mill opposed by environmentalists.

Gunns said its banks, led by Australian and New Zealand Banking Group, would not lend funds it needed to meet operational and working capital requirements.

“As a result the company is unable to continue trading and the directors are in the process of appointing an administrator,” Gunns said in a statement.

The company had tried to raise A$400m after New Zealand billionaire Richard Chandler pulled out of a restructing plan.

Earlier this year Gunns sold about half its stake in a forestry investment trust based in South Australia and Victoria for A$64m.

The move was part of Gunns’ strategy to focus on its interests in Tasmania where it is based. The company reported a near A$1bn loss in June, listing liabilities of A$879m against assets of A$903m.

Gunns blamed the high Australian dollar and cheap competition from Vietnam and Thailand. Gunnd is also the largest exporter of woodchips in the southern hemisphere.