Directors of the sandalwood company Quintis have called in administrators.
Quintis owns and manages thousands of hectares of Indian sandalwood plantations across northern Australia.
The company have decided to appoint KordaMentha as administrators and it is expected McGrathNicol will be appointed as receivers in a matter of days.
Shareholders have expressed anger, particularly those who had been calling for changes to the Quintis board.
'Flabbergasted and cross and very frustrated'
Spokesman for that group, John Allen, said he had only just returned from the United States.
Mr Allen said he had met with bondholder BlackRock, to no avail.
"I'm flabbergasted and cross and very frustrated. I represent over 400 shareholders — and we've been trying to get a rescue plan together," he said.
"All I'm thinking is the 400 shareholders I've represented are going to take a bath and it needn't have happened like that."
Shares in Quintis have not traded since May.
In a statement, Quintis said on January 19, Asia Pacific Investments exercised an option for Quintis to buy back 400 hectares of plantations at $37 million.
But, Quintis said, it did not have the money to pay the put option price.
Its statement said: "The purpose of the voluntary administration is to protect the interests of shareholders, creditors, employees, suppliers, growers and other stakeholders."
"The company understands that the receivers will further evaluate restructuring and sale alternatives, including a potential recapitalisation of the business."
Chairman Dalton Gooding said in a statement that "we are very disappointed with this outcome given the huge efforts made over the last nine months to recapitalise the company in order to delivers its sustainable future".
'This needn't have happened'
Mr Allen said he had taken a deeper interest in the direction of Quintis in the lead-up to the last AGM.
"At the AGM, I was furious at the attitude of the board and I said to Mr Gooding, 'If this were a battle and you were the general, I'd be raising the white flag'.
"After the meeting, a lot of shareholders contacted me [saying] we feel the same, and so we got together."
Mr Allen said former Quintis chief executive Frank Wilson had proposed what he thought was a good rescue plan.
"This needn't have happened, we all could've taken some pain, but if all the stakeholders had been in one direction, which is what we wanted, and accepted the plan from Frank Wilson's group — this could've been rescued.
"For me, it was a WA company that I believe in. It's got a unique product, it's good for WA, it's good for Australia and Indian sandalwood is a very valuable product.
"What we do now? I hope, still, it's not too late to resurrect it. I still hope that if BlackRock come to their senses — we can still do this."
'Growers remain positive'
Kununurra farmer Fritz Bolten, who has more than 400 ha of sandalwood in the Ord Irrigation Scheme, where Quintis is also a major employer, said local growers were trying to remain positive.
"I would have liked to have seen things go a different way but I must say I'm happy that we've got some action, we know that something else is happening and we hope that with this new administration we'll have clear communication going forward," he said.
Mr Bolten said despite Quintis' financial woes, the sandalwood industry had a bright future in the north.
"I'll try and work with all the people in the industry to make this [transition] as efficient and quick as possible to continue to grow these trees because we do have a really wonderful product.
"We really need the administrators to realise that the skill set that these people have got is very unique, nowhere else in the world are they doing as good a job growing these parasitic trees than here."
