Pinetec receivers PricewaterhouseCoopers say the saw mill component of the business will shut down next week if a buyer is not found.
PwC partner Derrick Vickers said he was in talks with two parties interested in acquiring the mill. The pallet manufacturing division of Pinetec was sold to Rodpak last month.
"We understand it is an uncertain time for employees who have been working as casual contractors during the settlement period," Mr Vickers said.
"It is with much regret that we have advised employees today that the mill will have to close on 29 April 2009 unless an unconditional sale agreement is in place by that date."
Problems for the business started early last year after an explosion at Verve Energy's Muja power station in Collie, which caused a reduction in revenue for Pinetec.
The company was also hit by the Varanus Island gas explosion, along with other players in the timber industry.
PwC said settlement for the sale of the pallet making business will take place early next month, with a small number of staff to remain at the Collie plant until mid May to wind down the business and assist with the relocation.
Rodpak has previously said it will merge the Collie pallet division with Pinetec's operations in Bassendean.