Banking association comments on the cash handling company’s decision not to accept the offer of support
The Australian Banking Association (ABA) said the offer of financial support to Linfox Armaguard from a coalition of banks, retailers, and supermarkets was made in good faith to ensure the company’s continuous operations.
The banking association confirmed earlier this week that Armaguard would not be accepting the financial aid offer and has instead chosen to rely on funding from its parent company to continue its operations and services.
The ABA said it welcomes Armaguard’s commitment that they will continue to operate.
“It is very welcome news that the parent company has decided to provide the short-term assistance to Armaguard,” said ABA chief executive Anna Bligh (pictured) in an interview with ABC Radio Brisbane. “The trucks are all still out there filling ATMs, providing it to supermarkets, pubs, and clubs – that’s a very welcome development.
“But in the long term, this is a very difficult problem. There’s no simple solution. We’ve all got to put our thinking caps on and find a different model that will help us get cash where it needs to be, even when it’s only accounting for maybe 5% of transactions, which could happen within the next three to five years.”
In October 2023, Linfox Armaguard alerted Australia’s primary cash users that the company was facing financial challenges and sought external support to remain viable. Following this, the banking sector, along with major retailers and Australia Post, initiated negotiations, even seeking approval from the Australian Competition and Consumer Commission (ACCC) for a collaborative industry response.
The Reserve Bank of Australia also played a role by organising roundtable discussions with stakeholders, including the Treasury, the ABA, and representatives from the banking and retail sectors, to address Armaguard’s financial issues.
A resolution appeared to have been reached on March 19 when Armaguard was offered a $26 million bailout, which did not require repayment, to support the company for the next six months. The offer came with conditions aimed at ensuring the funds would be used as intended, maintaining cash-in-transit services for customers, and allowing for transparency regarding Armaguard’s financial and operational status to explore further support options.
“Their preference was to take funds from the parent company, rather than open up all of their books,” Bligh said. “The only reason the parties wanted them to share some of their financial data is because we’re trying to help get the business to a viable position and help design a long-term future.”
“The offer of financial support was made in good faith to ensure the last major cash-in-transit company can continue to serve its customers,” part of the ABA statement read. “However, it is entirely up to Armaguard to decide how to fund their business and the decision of the parent company Linfox to fund them is a welcome development.”
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