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About 100 Otago timber industry jobs are on the line as receivers struggle to find buyers interested in the South Island operations of Southern Cross Forest Products as a going concern.
A former mill worker in South Otago, who lost his job in the last round of layoffs, said he was not surprised by the latest announcement.
"It's what we were expecting, the company was in a lot of debt."
His former colleagues would still be "pretty gutted" though.
He was looking for a new job, but was struggling to find one in the area and was considering leaving the district, he said.
Clutha District mayor Bryan Cadogan described the receivers' announcement as another blow for South Otago.
"Our thoughts are with the families and individuals and everything in our power will be done to alleviate the pain. We can't trivialise it, it's another hammer blow to our region."
The company's Thames sawmill and remanufacturing business had attracted considerable interest, but interest in its South Island operations did not justify continued trading there in its current form, receivers KordaMentha said yesterday.
"A number of parties are interested in buying the Thames operation intact," Brendon Gibson, of KordaMentha, said. "However, the South Island assets will be sold individually.
"Regrettably, we have had to advise 100 Otago-based staff that operations will cease progressively from mid- to late-June.
"Since SCFP entered receivership in early March, we have focused on selling the business as a going concern," he said.
"Unfortunately, with the expression of interest period now ended, this is no longer possible for the South Island business."
The decision had not been made lightly, Gibson said.
"While staff in Otago are yet to be given notice, we wanted to advise them as early as possible."
The receivers closed the sites yesterday afternoon to "ensure staff have time to adjust to this difficult news".
"We acknowledge the assistance that staff have received from the community and we will continue to support those initiatives."
SCFP wood-processing facilities in Thames were unaffected by the events in the South Island and continued to operate as usual, servicing their international and domestic customer base.
The sale process there has entered the due diligence phase for all interested parties.
The receivers last month announced the closure of SCFP's sawmill at Rosebank in Balclutha, with the loss of 79 jobs.
- The Southland Times