New plan to keep cash in Australia

Cash transport distributor Armaguard receives a $50m lifeline to stay in business. Picture: NCA NewsWire / Nikki Short

Cash will continue flowing through Australia after a $50m deal was struck between Armaguard and major banks and retailers, to ensure its services are easily accessed for at least another 12 months.

The agreement was finalised on Monday ahead of the July 1 delivery of the massive handout.

Cash transport distributor Armaguard receives a $50m lifeline to stay in business. Picture: NCA NewsWire / Nikki Short

Australia’s big four banks – ANZ, Commonwealth Bank, NAB and Westpac – teamed up with the four of the largest retailers in Wesfarmers, Coles, Woolworths and Australia Post to help the cash transport distributor stay in business.

The financial injection comes after Armaguard’s parent company, Lindsay Fox-owned transport and logistics giant Linfox, rebuffed a $26m emergency funding lifeline in March from the same group helping it out now.

Mr Fox said the financial support was a way for Armaguard to ensure cash remains available nationwide despite ongoing concerns.

“This is not a contest between the parties,” he said.

“There are no winners and losers here.

“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 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.”

Armaguard will continue to deliver cash to major businesses for another 12 months. Picture: NCA NewsWire / Nikki Short

The funding is contingent on Armaguard agreeing to efficiencies and cost savings under the agreed bailout conditions, including meeting monthly key performance indicators.

The agreement also includes a commitment by the parties to work together to develop an independent pricing mechanism to support a sustainable cash delivery business past the 12 month timeline.

Australian Banking Association CEO Anna Bligh said the agreement reflected the ongoing issues facing the sustainability of Cash-in-Transit services.

“This deal will keep cash moving around the country and ensure it remains available to Australians wherever they live,” she said.

“The 12 months of financial support also gives Armaguard the necessary time to restructure the business and realise the benefits from their merger with Prosegur.

“It also allows all parties to work through possible long-term solutions for sustainable cash access into the future.”

TWU National Assistant Secretary Emily McMillan said Armaguard employed about 1400 workers to move cash around the country who had to deal with the uncertainty of the business’ future over recent months.

“This deal is a welcome relief to our members who have faced months of uncertainty and troubling headlines about the future of their employer,” she said.

Armaguard is expected to agree to the conditions of the bailout agreement. Picture: NCA NewsWire / Nikki Short

Ms McMillan said the TWU was calling on banking clients to pay up to keep operations going.

“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,” she said.

“Regional communities and many in society still rely on cash transactions. It is a dangerous job to move money around this country, with armed hold-ups and workplace deaths tragically known to the industry.

“Cash-in-transit operations and drivers must be paid appropriately to avoid additional pressure to cut corners in safety to remain financially viable.”

The agreement has been submitted to the Australian Competition and Consumer Commission for approval.