Armaguard has struck a deal with its largest customers, ensuring the transporter’s survival for the next year.
The $50 million cash injection will “keep cash moving around the country” and follows a series of meetings led by the Reserve Bank of Australia that warned against the sustainability of the wholesale cash distribution system.
The new agreement will be funded by the Commonwealth Bank, Westpac, NAB, ANZ, Coles, Woolworths, Bunnings and Australia Post.
“This is not a contest between the parties. There are no winners and losers here,” Linfox Armaguard executive chairman Peter Fox said.
“No other nation has major banks, retailers and key distribution companies working together to achieve a more efficient Cash-in-Transit industry.
“Armaguard is also leveraging the expertise of its other shareholder, Prosegur, which is one of the world’s leading cash companies.”
The agreement between Armaguard and its biggest customers is expected to keep the business afloat over the next 12 months.
The Australian Banking Association (ABA) chief executive Anna Bligh said the financial support gave Armaguard the “necessary time to restructure the business”.
“It also allows all parties to work through possible long-term solutions for sustainable cash access into the future,” Bligh said.
“The parties recognise that the interdependency of the three elements of revenue support, efficiency and capital support must all be met.
“Armaguard has indicated its ongoing support to meet that objective including access to capital where appropriate.”
The Transport Workers Union (TWU) welcomed the deal, which saved the jobs of 1400 workers.
“This deal is a welcome relief to our members who have faced months of uncertainty and troubling headlines about the future of their employer,” National Assistant Secretary Emily McMillan said.
“While this news brings optimism of job security for the next year, wealthy banks and retailers must ensure the long-term viability of cash-in-transit operations by stopping the squeeze on transport contracts for a service our community needs.”
