Waste management giant Cleanaway could be on track to return Australia’s SKM back to “sustainable footing” with the company ready to take over the collapsing recycler.
SKM’s recent collapse has resulted in Australia’s recycling industry plunging into a worsening waste crisis, with tonnes of recycling being sent straight to landfill.
The company was ordered to stop taking recycling after a number of fires at its Melbourne facilities.
The recycler announced it had gone into receivership with $100 million worth of debts. However ASX-listed Cleanaway announced on Wednesday that it had acquired $60 million of that debt.
“The acquisition of the debt will allow us to work with the receivers to examine viable options for SKM,” Cleanaway chief executive Vik Bansal said in a statement.
“If a sale process is undertaken and if we are successful in purchasing any assets, we will return the assets to a sustainable footing.”
KordaMentha has also been appointed receivers to manage the business.
“We will be aiming to get the business back to capacity to help ease Victoria’s waste crisis,” Mark Korda said in a statement on Wednesday.
“This must be done within our statutory obligations to get the best value from the business while repaying the secured creditor.”
While SKM’s collapse was predicted, it was largely triggered by China’s decision to stop accepting overseas waste, sending Australia’s recycling industry into chaos.
As a result, Victorian warehouses are now full of unprocessed rubbish, while other recycling is being sent to landfill.
Mr Korda said with the interim financial support and industry knowledge of Cleanaway as the secured creditor, the receivers will immediately start sorting through what can be done.
That includes putting the operations on maintenance during an immediate assessment of the business, including the backlog of recyclable materials stored at each site.