Armaguard rejects deal, Coles resumes cash deliveries

Armaguard has rejected a $26 million funding deal from the nation’s biggest retailers and banks.

Parent company Linfox, owned by billionaire Lindsay Fox, will instead pour $10 million into the currency delivery business.

Earlier this month, the Australian Banking Association, the big four banks, Woolworths, Coles and Australia Post offered a funding package worth $26 million after being told the company was not financially viable.

The deal expired on Thursday afternoon but it’s understood Armaguard is still seeking a future cash injection from some of its biggest customers.

Concerns about Armaguard earlier prompted Coles to pause all currency orders until April 5, but that was later reversed.

Linfox director Bill Kelty met banking chiefs to try and find a solution to Armaguard’s woes. (Kelly Barnes/AAP PHOTOS)

The supermarket giant also reduced withdraw limits from $400 to $200 but has no plans to unwind the change.

On Thursday afternoon, Armaguard’s chief executive Mick Cronin said the company was working with customers and stakeholders on short term and long term financial solutions.

“Armaguard rejects the timing ultimatum by the (Australian Banking Association),” Mr Cronin said.

“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 is responsible for most of Australia’s cash deliveries and first requested the cash injection in October after regulators approved its merger with competitor Prosegur.

On Wednesday, Linfox director Bill Kelty met Reserve Bank Governor Michele Bullock and senior figures from Australia’s banking industry in a bid to find a solution to Armaguard’s woes.

The $26 million offer would have been enough to support the company for about six months and there was no expectation for it to be repaid.

Australian Banking Association chief Anna Bligh said an offer to Armaguard was made in good faith. (Lukas Coch/AAP PHOTOS)

It did have conditions, including an accountant to provide guidance on how to make the business viable.

Australian Banking Association chief executive Anna Bligh described it as a “generous cash offer” that had been had been made in good faith after being told the company was in financial distress.

“It is entirely up to Armaguard to decide how to fund their business and the decision of the parent company Linfox to fund them is a welcome development,” Ms Bligh said.

“The banking sector remains committed to ensuring cash is accessible for customers.”

The Transport Workers Union, which represents about 700 Armaguard workers, called on clients of the business to find a solution.

National Secretary Michael Kaine said workers needed certainty and the union was in ongoing talks with Armaguard.