Coles stops cash deliveries over Armaguard money woes
Armaguard has been offered a funding boost from a group of big banks and retailers. (Melanie Foster/AAP PHOTOS)
Coles has stopped Armaguard cash deliveries and reduced withdrawal limits in supermarkets as concerns grow about the future of the currency handling company.
Armaguard, a subsidiary of Lindsay Fox's Linfox, has been offered a funding boost from a group of big banks and retailers but it's understood the company is yet to formally respond.
Coles has paused Armaguard cash deliveries until April 5 due to the evolving situation.
It is also reduced withdrawal limits at supermarkets and liquor stores from $400 to $200 indefinitely.
"Due to industry-wide challenges with cash movements, we are taking some temporary steps to prepare for disruption to Armaguard services," a Coles spokesperson said.
On Wednesday, Armaguard representative Bill Kelty met with Reserve Bank Governor Michele Bullock and senior figures from Australia's banking industry in a bid to find a solution to the company's woes.
It comes after the big four banks, Wesfarmers, Coles, Woolworths and Australia Post put a funding offer in the vicinity of $26 million to Armaguard on March 19.
The group wants a response on whether Armaguard accepts the package, which would support the company to continue operations for about six months, by the end of Thursday.
Armaguard approached retailers and banks in late October to request a cash injection to keep providing distribution services after its merger with competitor Prosegur was approved.
Negotiations kicked off in earnest in December and there have since been dozens of meetings.
There is no expectation for the money to be repaid but it comes with conditions, including an accountant to provide guidance on how to make the business viable.
The Transport Workers Union, which represents about 700 Armaguard workers, has called on the business' clients to find a solution.
National Secretary Michael Kaine said workers needed certainty heading into the Easter long weekend.
"The (union) is engaged in ongoing discussions with Armaguard to protect workers," Mr Kaine said.
Linfox has been approached for comment.
Australian Associated Press
