Long-standing agricultural education provider Taratahi has been placed in interim liquidation by the High Court at the request of its board of trustees.
Taratahi is a private training establishment (PTE) and agricultural education provider, employing about 250 staff.
The establishment owns and manages eight farms throughout the country.
David Ruscoe and Russell Moore of Grant Thornton have been appointed interim liquidators.
Taratahi is facing financial and operational pressures caused by declining student numbers resulting in a reduction in the funding it receives for its educational business, Grant Thornton said.
It invested heavily in student support and learning, while it actively reduced its other operating expenses.
However, despite both Government subsidies and cash flows from its farming operations, the costs of educating each student still exceeded the funding based on its operating model, it said.
The board considered the interim liquidation as the most responsible decision to protect the current and future position of its staff, students, creditors and other key stakeholders.
Chair Mavis Mullins said it was distressing for the staff and board of Taratahi which would have celebrated 100 years in 2019.
Education Minister Chris Hipkins said the timing of this is tough, especially for students and staff.
Taratahi's financial problems surfaced at Taratahi in 2014 when it found not be providing the teaching it was funded to deliver and between 2009 and 2014.
As a result, Taratahi was left with debts of $7.5m due to under-delivery. This is in addition to the significant private sector debt they hold. Taratahi has repaid $3.5 of that mostly by selling assets.
"This is not a sustainable model," Hipkins said in a statement.
"We are taking steps to secure the home farm and we are talking to providers to fill the gap in provision for students. But what's clear is that the current model of vocational training for primary industry is broken," he said.
Hipkins said the Government was committed to finding a solution that will see continuity of training for students.
• 190 permanent staff, plus casual and contractors means 250 people work for the organisation.
• 3 Residential campuses based in Wairarapa, Telford and Reporoa.
• Owns 2 farms, leases 5 and manages 1
• 10 non-residential campuses
• 2850 students in 2018
• 62,000 stock units