Wednesday, 21 August 2019

Mark Korda and Bryan Webster of KordaMentha were today appointed as Receivers and Managers of most of the SKM Group (SKM or the Group), one of Australia’s biggest residential material recyclers capable of processing more than 400,000 tonnes of commingled recyclable material annually. 

Established in 1999, SKM owns and operated seven sites including three material recovery facilities and a transfer station in Victoria and a material recovery facility in Tasmania. The appointment excludes the Group’s glass recovery business known as Glass Recovery Services (GRS) which separately holds glass processing facilities in Penrith (NSW) and Coolaroo (VIC).

The Group employs approximately 170 permanent staff and is headquartered in Laverton North. SKM accepted and processed commingled recyclable material from more than 30 councils and municipalities in Victoria, South Australia and Tasmania. SKM ceased accepting recyclable material to most of its sites more than three weeks ago.

Mr Korda said: “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.”

The appointment of Receivers follows EPA intervention in early 2019 over fire risk concerns from stockpiled commingled material at a number of SKM’s sites. SKM has been exploring options for the business, including a sale or recapitalisation. The previous secured creditor appointed Receivers over SKM Corporate Pty Ltd following the appointment of Liquidators by the Supreme Court of Victoria on 2 August 2019.

SKM’s secured creditor, Cleanaway Waste Management Limited, is owed more than $60 million. The total amount outstanding to creditors and employees is estimated to be $100 million. 

Mr Korda said that with the interim financial support and industry knowledge of Cleanaway as the secured creditor, the Receivers will immediately implement the following three-point plan: 
  1. Place the operations on care and maintenance during an immediate assessment of the business, including the backlog of recyclable materials stored at each site;
  2. Determine the appropriate rescue and restructure package required for the business;
  3. Execute an appropriate path forward, which may include a sale process.

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Michael Smith, Inside Public Relations, 0411 055 306, [email protected]