Some 43,000 investors have been left stranded by the collapse of the second major managed investment scheme in recent weeks, with Great Southern being put into the hands of receivers yesterday.
It is believed the company owes investors roughly $4 billion and its collapse follows that of rival MIS Timbercorp last month.
Ferrier Hodgson was yesterday appointed as receiver for the MIS giant, which has, over the past 22 years, grown to become Australia's leading forestry and agricultural fund manager.
But GSL used the controversial MIS model to provide packaged products and finance for investors seeking "tax effective" options in the agribusiness sector.
During the last five years alone Great Southern has raised $1.8 billion and currently manages approximately 45 MIS projects.
The GSL forestry business owns and leases approximately 240,000 hectares of land, plus it owns more than 150,000 cattle across approximately 1.5 million hectares of owned and leased land.
But GSL director Cameron Rhodes said the company was left with "no alternative but to take this sad and disappointing course of action after the group's club banks declined to continue to support the company’s restructuring program".
The company had been in negotiations with banks over $109 million in refinancing due in October, but GSL also had an overall net debt of closer to $700m.
To meet this October obligation the company had offered up for sale 44 of its timber properties in Queensland and NSW, while Consolidated Pastoral Company was reportedly eyeing off three of GSL's northern cattle stations.
Mr Rhodes said Great Southern had been working on a restructure program for the past 15 months, after recognising the need to diversify its earnings and cash flow, reduce its reliance on annual MIS sales, reduce its level of gearing and to derive more value from its strategic asset base.
"Earlier this year, the company continued its restructuring program by implementing a clear and comprehensive five-point plan we believe had the capacity to deliver maximum value for all stakeholders of the group," Mr Rhodes said.
"However, while advanced in this short term plan, the company still has some reliance on MIS sales to generate short-term cash flow.
"Because of the increasing market uncertainty surrounding MIS sales and the funding of those sales, which were no doubt compounded following Timbercorp’s appointment of voluntary administrators on April 23, the company had begun discussions with our banks in regards to working capital and a request for the provision of a short-term bridging facility which would assist the company through to asset realisations, which we had expected would generate over $200 million over the coming months.
"Despite our comprehensive plans, which included the listing of cattle stations for auction in June and the sale of other non-core land holdings and not withstanding the fact that the company remained within the terms of its facilities and no debt was currently due and payable, our banking syndicate declined our request for additional support."
Ferrier Hodgson partners Martin Jones, Andrew Saker, Darren Weaver and James Stewart were appointed the voluntary administrators.
Mr Jones said the first job would be to review the group's financial position and communicate with key stakeholders.
The administrators said they would be contacting creditors within the next few days to inform them of the details of the first meeting of creditors, to be in Melbourne on Wednesday May 27.
"Great Southern has a complex structure with numerous managed investment schemes and significant agricultural assets," Mr Jones said.
"The company was already well progressed with restructuring its business and executing an asset sales plan and we will be working with management and key stakeholders to leverage the work already done to date and to preserve assets and maximise the value of the Great Southern assets for the benefit of all stakeholders."
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