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Receiver looks for best way forward after revealing SKM is $100m in debt

SKM Recycling has been placed into receivership as the company owes $100 million, with $60m of that owed to Cleanaway Waste Management.

On Wednesday, it was announced that KordaMentha has been appointed as the receiver and manager of the majority of SKM Group.

In a statement, Cleanaway announced it appointed Mark Korda and Bryan Webster of KordaMentha as receivers of all SKM’s entities, with the exception of its Glass Recovery Services business.

This includes the property, plant and equipment that form part of a network of five recycling sites, including three material recovery facilities (MRFs), a transfer station in Victoria and a material recovery facility in Tasmania.

SKM, which employs about 170 permanent staff, ceased accepting recyclable material to most of its sites in late July – affecting more than 30 councils.

Korda said the receivers aim 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,” Korda explained.

In late July, SKM Recycling stopped receiving recyclables from 33 Melbourne councils it holds contracts with.

The announcement from SKM came after the company was banned from receiving recyclable material in mid-July at its Laverton site. The EPA Victoria had also issued SKM with a notice that required the company to bring its outdoor stockpiles at its Coolaroo facility into compliance with the Victorian Waste Management Policy.

SKM had been party to legal proceedings in the Supreme Court as creditors sought to recover $4.3m or an order to declare the company insolvent. On July 24, the Supreme Court gave SKM 10 days to find a buyer and repay its debts.

KordaMentha is now implementing an immediate plan to place SKM’s operations on care and maintenance during an assessment of the business, including the backlog of recyclable materials stored at each site.

The receiver is determining the appropriate rescue and restructure package required for the business and it is looking for the best path forward, which may include a sale process.