Cleanaway buys into recycling collapse

CLEANAWAY has acquired SKM’s $60 million debt to the Commonwealth Bank, positioning it to buy the company after its collapse sparked a recycling crisis in Victoria.

Thousands of tonnes of recyclable waste is being sent to landfill as the 33 councils that had contracts with SKM try to find an alternative.

Cleanaway appointed KordaMentha as receivers and managers of the business after acquiring SKM’s major debt.

Cleanaway chief executive Vik Bansal said the move would “allow us to work with the receivers to examine viable options for SKM”.

“If a sale process is undertaken and, if we are successful in purchasing any assets, we will return the assets to a sustainable footing,” he said.

“It will also present us with an opportunity to add to our network of prized infrastructure assets.”

KordaMentha partner Mark Korda said yesterday: “We will be aiming to get the business back to capacity to help ease Victoria’s waste crisis.

“This must be done within our statutory obligations to get the best value from the business while repaying the secured creditor.

“We will also begin working immediately with the Victorian Government and regulators to prepare for a path forward.”

SKM has total debts of about $100 million, including to its staff and other businesses as well as Cleanaway, the secured creditor.

Mr Korda said Cleanaway was providing interim financial support and industry knowledge to help with a three-point plan, including a possible sale of the business.

The receivers are also looking at how to deal with “the backlog of recyclable materials stored at each site”.

SKM’s glass processing business is excluded from the receivership.