More than a year after Bingo Industries was taken private in a $2.6bn buyout by Macquarie Asset Management, loans in the company are selling at a discount in the debt market in what is being taken as an early signal of distress.
Sources believe that Macquarie’s debt pile on Bingo is understood to be more than $600m and consists of a diversified group of financiers.
It is understood that a small parcel of the debt recently traded at about 80c or 90c in the dollar.
Bingo’s Eastern Creek Landfill Facility in western Sydney is taking longer to build than anticipated, sources say, in what is a hindrance to the company.
The waste management company said last month that recent weather had delayed some pipe laying works, but they were still on schedule, with the landfill gas pipeline upgrade about 85 per cent completed and further works to be carried out over the coming weeks.
But the situation comes at a time when Bingo is believed to be bidding for a landfill up for sale in Queensland that sources believe may sell for more than $500m.
It also comes after Bingo in August pleaded guilty to criminal cartel offences relating to price fixing following an investigation by the Australian Competition & Consumer Commission.
Bingo was founded by the Tartak family in 2005 and listed in 2017 with a $628m market value, priced at $1.80 a share.
It purchased rival Dial A Dump for $578m in 2018.
In April last year, the company was subject to a buyout by Macquarie Group for $2.6bn, or $3.45 a share.
Its operations include skip bin hire, commercial services and recycling centres.
DataRoom understands that Bingo’s rival Cleanaway at one stage considered an acquisition of the business, but some now believe Cleanaway itself could soon be ripe for a takeover if its shares fall to about $2.50 each. On Wednesday, its shares closed at $2.76 with its market value at $6.14bn.
Moody’s in August downgraded Bingo’s debt to B2, from Ba3, with earnings for the 2022 financial year far below expectations on the back of labour shortages, supply chain issues and abnormally wet weather in its key NSW market.
Also hurting the company was challenges to the construction industry, with cost blowouts on fixed-price contracts.
In the price fixing case, it is alleged that in mid-2019 Bingo agreed with competitors Aussie Skips Bin Services and Aussie Skips Recycling to fix and increase prices for the supply of skip bins and the provision of waste processing services for building and demolition waste in Sydney.
Bingo’s former managing director and major shareholder, Daniel Tartak, was also charged with two criminal cartel offences.
Mr Tartak’s father, Tony, built a waste business empire that started with spending almost $1m buying a four-skip truck business.
The Tartak family is ranked as one of Australia’s richest families with a wealth of $759m.
The now privately owned Bingo operates more than 330 garbage trucks, skips and other waste management equipment.
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