SKM recycling collapses with $100m debt
Plastic has helped and hindered the planet. Photo: Getty
One of Australia’s biggest recycling companies has collapsed with debts worth $100 million, plunging the struggling industry even further into crisis.
Receivers have been appointed to most of the SKM Group, which employs about 170 permanent staff and processes recycling from councils in Victoria, South Australia and Tasmania.
Cleanaway Waste Management is owed more than $60 million as a secured creditor, while the total amount outstanding to creditors and employees is estimated to be $100 million.
But receivers KordaMentha want to get the business going again.
‘‘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.’’
China’s decision to stop accepting overseas waste was the first domino in a series that ended up with SKM collapsing and Australia’s recycling piling up with no one to process it.
SKM was ordered to stop taking recycling after a number of fires at its Melbourne facilities, but the company was also unable to send the material overseas.
Warehouses full of unprocessed rubbish are now filling up in Victoria, while other recycling is being sent straight to landfill.
The receivership appointment excludes the SKM’s glass recovery business Glass Recovery Services, which has glass processing facilities in Penrith and Melbourne, but has also been banned from taking waste at its Melbourne site.
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.
They will also look at how to restructure the business and look at a potential sale.