Australia's Armaguard secures funding from parent, rejects rescue deal
28/03/2024 04:07
SYDNEY, March 28 (Reuters) - Australia's money transit
provider Armaguard said on Thursday it had secured the funding
needed to avoid insolvency from parent firm Linfox, easing
concerns among top supermarket chains and banks about cash
shortages over the Easter weekend.
Owned by billionaire businessman Lindsay Fox, Armaguard
Group, had been in talks with major banks and retailers
including Coles Group COL.AX and Woolworths WOW.AX to secure
a last-minute, short-term funding deal that would keep its
banknote distribution services functioning.
But after Linfox stepped in, Armaguard said it had rejected
that deal.
"Armaguard continues to operate its full suite of services
and is confident that over the coming months, it will get the
business onto a long term sustainable footing with appropriate
support from the industry," Armaguard CEO Mick Cronin said in a
statement sent to Reuters.
Armaguard merged with rival Prosegur last year to create a
near-monopoly that was supposed to prop up the industry. But
despite the merger, Armaguard said its cash distribution
business remained unsustainable amid a rapid shift towards
cashless transactions.
Armaguard customer Coles said it was limiting cash
withdrawals to $200 per customer over the Easter public
holidays, which begin on Friday, even through its services from
the cash distribution company had been fully restored.
"Customers can continue to pay with and withdraw cash at
Coles supermarkets and liquor stores this weekend and ongoing,"
a spokesman said.
The Reserve Bank of Australia has said that with the
declining use of cash for transactions, developing a sustainable
model for cash distribution was complicated, but key.
(Reporting by Byron Kaye and Stella Qiu; Writing by Praveen
Menon; Editing by Miral Fahmy)
((praveen.menon@thomsonreuters.com; Reuters Messaging:
praveen.menon.thomsonreuters.com@reuters.net; Twitter:
@Journopraveen))