Last week, Gunns Limited managing director Greg L'Estrange told the ASX that investors should disregard previous financial information about the proposed mill in favour of a pending update.

Gunns released a statement after 5pm confirming that its preparation for an equity offer was continuing.

The company further asked that its suspension from trading continue until details were finalised regarding proposed equity raising and associated documentation.

It said that was in confidential talks with institutional investors on the proposed offer.