MIS giant Timbercorp has gone into administration, owing $562.9 million. 

Directors called in administrators Mark Korda and Leanne Chesser of KordaMentha early this morning, the Herald Sun reports.

The company owns thousands of acres of plantations, including Australia's biggest olive grove at Boort, in Victoria's north.

Timbercorp employs about 170 people in Melbourne, Perth, Hamilton, Mildura and Penola and indirectly supports a further 1500 workers and contractors in allied industries.

Mr Korda said Timbercorp has invested more than $2 billion in agribusiness projects on behalf of 18,500 investors since 1992.

"The company has been hurt by the combined impact of declining global asset values, tightening credit, the economic downturn and drought,'' Mr Korda said in a statement.

Figures Mr Korda revealed show that Australia's largest managed agricultural investment group owes $903.1 million and has net assets of just $595 million.

Timbercorp chiefs had been in talks with their major banks - the ANZ, Westpac and the Bank of Scotland International - for the last week seeking to defer and restructure their various loans to the company.

Sol Rabinowicz, chief executive of the embattled business, revealed last week that Timbercorp had fully drawn up to $367 million in bank loans.

Timbercorp manages approximately 120,000ha of large scale forestry and horticulture assets.

It has raised more than $2 billion from 18,500 investors to fund forestry and horticulutal investment projects since 1992.

Industry experts have said that these grower investors should take heart because the propery leases they obtained and their crops enjoy legal protection under the Corporations law.

The same does not apply to Timbercorp's 14,400 shareholders who are likely to forefeit their shares.

In his statement today, Mr Korda said the administrators would implement the following three point plan:

1. Immediate suspension of forestry and horticulture operations whilst funding options are determined

2. Develop a strategy for each forestry and horticulture product, project by project, then execute

3. Attend to statutory reporting, investigation, creditor and shareholder liaison

The process of voluntary administration is designed to explore quickly the options for the company.

The voluntary administrators will be writing to all creditors to provide notice of the date of the first meeting of creditors.
The first creditors meeting will be held within eight business days after the appointment of a voluntary administrator.

Timbercorp had previously announced that its business model was no longer appropriate in the current environment due to the capital intensity of the projects.

It was in the process of transforming the business into an integrated agribusiness company.

Mr Korda said the administrators would immediately suspend forestry and horticulture operations while funding options are determined.

The administrators will develop a strategy for each forestry and horticulture product, project by project.

Timbercorp offered managed investment schemes based on its agribusiness estate.

More to come. Keep checking WeeklyTimesNow for updates.

- Geoff Easdown and Ben Butler with AAP