Bingo Industries Limited (ASX: BIN) operates as waste management and recycling company. The Company offers front and rear lift commercial waste bins and compactors to handle waste such as general waste, paper, cardboard, and co-mingled recyclables. It also provides solutions for liquid waste such as oily waters, grease traps, wash waters, and chemicals.
On 8 January 2019, the company has briefed in its update, that it has provided an undertaking to the Competition Commission (ACCC) to dispose of its waste recycling facility located in the in Banksmeadow. This step is taken up in order to address ACCC concern about the Company’s purchase plan of Dial A Dump Industries (“DADI”). Following the release, the share price of BIN increased by 5.656% on 9 January 2019.
BINGO has offered the mentioned undertaking to the commission concerning the response to the issues which have been raised by the regulator released on 29 November 2018. The commission is now in the stage to garner additional market consultations in respect of the proposed undertaking. In addition to its continual pursuance of the matters which are been raised in the document, the commission has given an indication that the conclusion of the case can come out till 21 February 2019.
BINGO’s Managing Director and Chief Executive Officer, Daniel Tartak have said that the company remains consistent with the view that its acquisition would not in any way lead to a lessening of competition.
The firm has now offered to divest the facility which is located at the Banksmeadow. This radical action was initiated in order to alleviate the concerns which have been time and again highlighted by the commission regarding the B&D processing facility which is located in the interiors of Sydney. If it leads to the commission providing the ultimate approval for the acquisition of DADI to go through as was announced by Q1CY19. DADI is very critical as well as integrated recycling and waste management business in NSW.
Mr. Daniel Tartak, the MD of the company, said that the DADI acquisition is a very significant milestone for the company. The firm is entirely dedicated and has a whole lot of conviction in working with the ACCC to reach a fruitful conclusion. He emphasized on the fact that the firm’s acquisition of the target company will enable fair competition in the markets, as it would act as an enabler for the company to compete against the already established national and international players across Australian industry.
If the commission is willing and gives consent to the company’s proposed undertaking and its worries are been alleviated by the company about the acquisition. In such case, the Banksmeadow facility would be sold off according to the submitted undertaking.
If such scenario is realized, the company anticipates that surplus funds will become available. Based upon which it will review all its options concerning the surplus capital allocation. This may also include the possibility of an ensuing share buyback.
Meanwhile, the stock price of the company has fallen by 24.95 percent in the past six months as on 8 January 2019. BIN’s shares traded at $2.055 with the market capitalization of circa $1.13 Bn as on 9 January 2019.
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