Cash will keep moving across Australia after transporter Armaguard secured a $50 million bailout from the country’s biggest banks and retailers.
The agreement, funded by the Commonwealth, Westpac, NAB and ANZ banks, along with Coles, Woolworths, Wesfarmers and Australia Post, means Armaguard will receive monthly payments in exchange for efficiency and restructuring requirements.
The monthly payments will come with other key performance indicators and can only be unlocked if Armaguard keeps up its end of the deal.
Negotiations for the deal were led under the auspices of the Australian Banking Association with authorisation from the Australian Competition and Consumer Commission.
“This deal will keep cash moving around the country and ensure it remains available to Australians wherever they live,” Australian Banking Association chief executive Anna Bligh said.
Armaguard is Australia’s sole distributor of bank notes and coins after merging with competitor Prosegur in 2023 and there are concerns the country’s cash economy would not survive if the company folded.
The deal, if approved by the Australian Competition and Consumer Commission, buys time for the country’s biggest businesses to come up with a plan if Armaguard fails.
“No other nation has major banks, retailers and key distribution companies working together to achieve a more efficient cash-in-transit industry,” Linfox Armaguard executive chairman Peter Fox said.
“Armaguard has indicated its ongoing support to meet that objective including access to capital where appropriate.”
The Transport Workers Union national assistant secretary Emily McMillan welcomed the deal, saying 1400 workers were relieved to have some job security for the year ahead.
She said it was important for “wealthy banks and retailers” to ensure the long-term viability of cash-in-transit services.
“Regional communities and many in society still rely on cash transactions,” Ms McMillan said.
Treasurer Jim Chalmers said the government had been working with the banks, private sector providers and others to ensure cash continued to circulate within the economy.
The deal comes three months after Armaguard rejected a $26 million deal from the banks, Woolworths, Coles and Australia Post despite being told the company was not financially viable.
Instead, its parent company Linfox, owned by billionaire Lindsay Fox, announced it would pump $10 million into the business as Armaguard worked to find solutions to its financial woes.
Ms Bligh said the new deal gave Armaguard the time to restructure its business following the Prosegur merger and allow it and its customers to work out a long-term solution.
The ACCC says it is aware major banks and retailers have announced they reached an agreement with Armaguard.
A spokesperson said the commission expects to receive a further application in relation to any competition exemption needed for the deal.
“Once an application is received the ACCC will assess it in due course and our public register will be updated accordingly,” the spokesperson said.
Concerns over Armaguard’s future prompted Coles to stop cash deliveries to its stores earlier this year, but the supermarket later reversed the decision.
It also reduced the amount of cash customers may withdraw in shops from $400 to $200, but there are no plans to unwind the change.
Melissa Meehan and Kaitlyn Offer
(Australian Associated Press)
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