BREAKING NEWS: Receivers appointed to ABC Learning Centres

Australia’s largest childcare company ABC Learning Centres has finally collapsed, putting the future of the company’s 1200 childcare centres at risk.

Australia’s largest childcare company ABC Learning Centres has finally collapsed, putting the future of the company’s 1200 childcare centres at risk.

ABC’s board, led by chairman David Ryan, announced this morning that the board had appointed Ferrier Hodgson as voluntary administrator after a lengthy review of the company’s operations.

“The board and current management team are disappointed to be in this position despite the efforts of so many staff and the continued support of parents,” Ryan says.

Following the company’s fall into voluntary administration, the company’s banking syndicate, led by Commonwealth Bank, has appointed insolvency firm McGrathNicol as receivers.

The receivers must now scramble to keep the company’s centres open and try to find a buyer for the stricken group.

The first task of the receivers will be to examine the company’s cashflow and determine whether there is enough money to continue to trade. If there is not sufficient cash, the banking syndicate will be required to fund ABC’s cash requirements until a buyer can be found.

However, the messy state of ABC’s accounts have deterred all of the firms who have run their eye over the business in recent months, including Macquarie Group, Morgan Stanley’s private equity firm, and US childcare company Knowledge Universe.

Under normal circumstances, the banking syndicate would shut down the operations of a company in receivership if it did not think there was a prospect of selling the company.

However, these are not normal circumstances. The Federal Government has been investigating contingency plans if ABC collapsed and ABC’s banking syndicate is in discussions with the Government about putting some sort of funding arrangement in place to keep the centres running in the short term.

Finance Minister Lindsay Tanner said this morning that the Federal Government will not be involved directly in running the centres owned by ABC, but will work to ensure disruption is kept to a minimum.

“Clearly one of the key things we have got to do is to make sure we minimise disruption to people with arrangements.”

“We can’t allow a situation to emerge when there’s thousands of families around the country that depend on their childcare is suddenly taken away and no alternative.”

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