The receivers of ABC Learning Centres have begun the desperate race to keep the company’s 1200 childcare centres open, and will seek a cash injection from the Federal Government.
The receivers of ABC Learning Centres have begun the desperate race to keep the company’s 1200 childcare centres open, and will seek a cash injection from the Federal Government.
Receiver Chris Honey from insolvency firm McGrathNicol declined to say yesterday how much money is needed to keep ABC Learning operating in the short term, although there are reports this morning that the receiver has asked the Federal Government for around $60 million.
“We’re working closely with the group’s financiers and with the Government to ensure the continued trading of the business,” Honey told reporters yesterday.
“The key message to come across today is that parents and staff can be reassured that following our appointment the group’s childcare centres will continue to operate, certainly while we conduct a review of the group.
“There is a sense of urgency with regards to the review of ABC’s business, and it is critical to maintain the confidence of parents.”
The Federal Government, which has appointed PPB Recovery Forensics Advisory as an adviser, is yet to release details of a possible rescue package. But Deputy Prime Minister Julia Gillard says the Government will assist parents where necessary.
“Our first priority is to make sure that mums and dads that rely on services at ABC Learning are still able to access the childcare that they need,” Gillard said yesterday.
It has also been revealed Australia’s big four banks are owed more than $1 billion by ABC. ANZ said it was owed $182 million, Westpac says it has an exposure of about $200 million, and NAB confirmed a $140 million exposure. Commonwealth Bank is believed to be owed $650 million.
Receivers are also likely to start trying to find a buyer for the company. While the messy state of ABC’s accounts will deter many large buyers, there is scope to sell the company’s profitable centres in smaller parcels.
But this process is likely to be long and potentially drawn out.
ABC’s receivers have set up a hotline for public queries: 1800 222 543.
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For a full wrap up of ABC Learning’s travails, go to SmartCompany’s special ABC Learning page.
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