Pulp and paper analyst Robert Eastment yesterday said that FEA was caught in the middle as the fallout intensified from the collapse of managed investment scheme companies Great Southern and Timbercorp, as well as Gunns' 98 per cent profit drop.

FEA's shares remain suspended from trading on the Australian Securities Exchange as it battles to renegotiate a $200 million finance facility.

An ASX announcement is expected before tomorrow.

There has been growing speculation that FEA could be placed into administration, throwing 200 workers into uncertainty.

Mr Eastment said that would be a disaster for the industry.

"The fat lady is on stage but she is not singing - hopefully she will walk off," Mr Eastment said.

"FEA has $500 million worth of assets and $200 million worth of debt - banks wouldn't have a problem with any other industry, it is just that they have recently been burnt by some tree companies.

"FEA is a good company in an industry that people need but some don't like."

He said that the financial outlook for timber companies was better this year - with improved woodchip prices and quantities expected from Japan as well as new contracts possible from Asia as a consequence of the damaged caused by the Chilean earthquake.

Chile's two main ports of Puchoco and Vicente have been cut off after the disaster, throwing uncertainty over a three million tonne export woodchip business.