Cleanaway Waste Management has agreed to pay $66 million to buy the recycling assets of SKM, whose financial collapse led to tonnes of Victorian recyclable materials being sent to landfill.
ASX-listed Cleanaway, which had been in pole position to scoop up the assets since it acquired $60 million of SKM debt in August, on Wednesday said it had reached a deal for the stricken group's properties, plant, equipment and other assets.
Australia's largest waste management firm will take over three material recovery facilities in Victoria that include the Laverton North plastic sorting facility, plus a material recovery facility in Tasmania.
Read Next The acquisition also includes two properties in South Australia that Cleanaway said it does not plan to use and may sell.
Victoria's recycling system was thrown into disarray when the state's environmental watchdog ordered SKM to stop accepting waste by over safety concerns about waste stockpiles and fire risk.
With waste piling up, SKM collapsed in August with debts of more than $100 million.
"Since the appointment of receivers and managers, significant progress has been made in clearing waste stockpiles from the sites, repairing plant and equipment and bringing the sites to required safety, environmental and operational standards," Cleanaway chief executive and managing director Vik Bansal said.
"We expect to gradually restore operations in Victoria over the coming months to provide councils with a quality, sustainable solution for their recycling."
Mr Bansal said Cleanaway expected to retain the majority SKM's workers and that the Victorian government's decision to loan $10 million to receivers KordaMentha had been crucial to the clearing of stockpiles and the reopening of Laverton North.
Environment Minister Lily D'Ambrosio on Monday said Laverton North was "back and fully operational", with six councils again using the state's largest processing plant and others negotiating to recommence recycling of curbside materials.
But state Opposition Leader Michael O'Brien said there was still a lot to be done before Victoria's recycling sector was in order.
"We need all of SKM's stockpiled plastic to be dealt with. The government needs to sort out those warehouses straight away," he told reporters on Wednesday.
"We still have dozens of councils (offline), which means millions of Victorians are seeing their recycling sent to landfill."
Mr Bansal said Australia's recycling sector is undergoing significant structural change, with a move to increase recycling and support a transition towards a circular economy.
"The acquisition provides us with the infrastructure to capitalise on the growth opportunities created by these changes."
Cleanaway shares surged as much as 7.3 per cent on Wednesday and were still 6.5 per cent higher at $2.045 shortly before the market closed.