Felled: Gunns has run out of money. Photo: Penny Stephens PKS

• Banks fear Gunns almost out of bullets

Woodchipper Gunns is appointing a voluntary administrator after failing to secure funds to keep the company running.

Gunns had been in talks with lenders seeking support for its plans for a capital raising or restructure, but those lenders have now told the company they will not provide further funds, Gunns said.

“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.

Following the appointment of administrators, who have yet to be named, insolvency firm KordaMentha is expected to be appointed receiver on behalf of Gunns’ banking syndicate, led by the ANZ.

Gunns employs about 645 employees in Tasmania, Victoria, South Australia and Western Australia.

It has been hit hard by massive writedowns on the value of its forestry assets, and had been seeking to raise about $400 million to cut debt and support the development of a pulp mill at Bell Bay in Tasmania.

Gunns made a $904 million loss in the 2011/12 financial year.

Shares in Gunns have been in a trading halt since March 9, when New Zealand-born billionaire Richard Chandler decided against investing in the company.

‘‘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,’’ it said.

‘‘The company is very grateful to all those people, especially employees, past and present, who worked hard to support the company’s strategy.

‘‘This is a disappointment for them and those associated with the restructure of Gunns business to a plantation-based manufacturing industry in Tasmania.’’