Yahoo Finance Huge development for future of Aussie cash
Australia’s big four banks – ANZ, Commonwealth Bank, NAB and Westpac – teamed up with four of the largest retailers in Wesfarmers, Coles, Woolworths and Australia Post to help the cash transport distributor stay in business.
The $50m deal, finalised on June 24, is in place for 12 months.
The Australian Consumer and Competition Commission on Wednesday gave interim authorisation to allow the Australian Banking Association, banks and retailers to provide financial contributions to the cash-in-transit business.
The ACCC has approved only the financial part of the deal, as the ABA, banks and retailers want to assess “operational sustainability and efficiency measures across services under their respective service agreements and with Armaguard’s cash-in-transit business”.
The parties are also seeking to develop – but not implement – an independent pricing mechanism in respect of their cash services agreements with Armaguard.
“At this time, we have only provided interim authorisation on the financial support aspect of this package,” acting ACCC chair Mick Keogh said.
“We consider that the financial assistance to Armaguard increases the likelihood of a more sustainable supply of wholesale cash distribution services as well as access to cash by businesses and members of the public across Australia.”
The ACCC is calling for submissions about the operational sustainability and efficiency measures and the independent pricing mechanism aspects by July 24.
“In assessing those measures, we expect the ABA, major banks and retailers and Armaguard to commit to consulting with other affected parties in a meaningful way so as to ensure the interest of communities across Australia, particularly those in regional and remote areas, are taken into account,” Mr Keogh said.
“We expect this would include affected parties being consulted and provided with transparency about any proposed measures before they are implemented.”
Armaguard’s parent company, Lindsay Fox-owned transport and logistics giant Linfox, had rebuffed a $26m emergency funding lifeline in March from the ABA, banks and retailers before accepting the June 24 deal.
ABA chief executive Anna Bligh said at that time 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.”
