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Coles Takes Precautionary Measures Amid Armaguard Funding Concerns

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Coles Takes Precautionary Measures Amid Armaguard Funding Concerns

Coles has implemented precautionary measures in response to the uncertainty surrounding Armaguard, a cash handling company facing financial challenges. Armaguard, a subsidiary of Linfox owned by Lindsay Fox, is currently in discussions with a consortium of major banks and retailers for a financial lifeline to sustain its operations.

In light of the situation, Coles has temporarily halted cash deliveries by Armaguard and reduced withdrawal limits at supermarkets and liquor stores as a preventive step. The decision to pause cash deliveries and lower withdrawal limits is a proactive measure to mitigate potential disruptions in cash services due to Armaguard’s financial instability.

Representatives from Armaguard, including Bill Kelty, recently met with high-ranking officials such as Reserve Bank Governor Michele Bullock and key figures from the banking industry to address the funding challenges. The big four banks along with Wesfarmers, Coles, Woolworths, and Australia Post have collectively offered a financial package of approximately $26 million to support Armaguard.

The funding proposal, extended to Armaguard on March 19, is contingent on the company’s acceptance and is intended to provide operational support for an estimated period of six months. The consortium expects a response from Armaguard on the funding offer by the end of Thursday to facilitate timely decision-making and continuity in cash handling services.

Armaguard initiated discussions with retailers and banks in October seeking financial assistance following the approval of its merger with Prosegur. Negotiations commenced in December with multiple meetings conducted since then to address the company’s financial sustainability concerns.

Amidst the funding discussions, the Transport Workers Union, representing about 700 Armaguard employees, has advocated for a resolution that safeguards workers’ interests. With ongoing engagements between the union and Armaguard, efforts are being made to secure a path forward for the employees and ensure stability during the Easter holiday period.

Linfox, the parent company of Armaguard, is yet to comment on the unfolding situation. As Armaguard navigates the challenges posed by its financial status, stakeholders await a decision on the funding offer to determine the future outlook for the cash transport company.

Rachel Adams

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