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Thursday, September 9, 2010 |
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Childcare company ABC Learning in receivership |
by - added 08/11/2008 |
International childcare operator ABC Learning Centres Ltd. appointed voluntary administrators Thursday to help clear a mountain of debt but assured parents that the receivership would not affect operations at its childcare centers around the world.
The directors of ABC, the largest childcare center operator in Australia and second-largest in the United States, appointed Ferrier Hodgson Group as voluntary administrators. The company’s banking syndicate appointed advisory firm McGrathNicol as receivers.
ABC chairman David Ryan said the ABC board and management were “disappointed” to be in this position but said quality childcare would continue. The company has almost 1,200 childcare centers in Australia and New Zealand and more than 1,000 in the United States, as well as more than two dozen nurseries in Britain.
ABC Learning’s total debt at June 30, 2007, was 2.2 billion Australian dollars ($1.5 billion), compared with A$111 million at the end of fiscal 2004.
The company, which gets a large proportion of its revenue from Australian government childcare subsidies, has delayed filing annual results for its latest financial year.
“I would like to assure you that our appointment allows your local childcare center to continue to operate on a ‘business as usual’ basis,” said a letter to parents from Murray Smith, one of the McGrathNicol receivers. “The interests of children and families are central to our considerations as we work constructively with the Group’s management, its financiers, the Australian Government and other stakeholders to determine the way forward.”
The federal government is in discussions with creditors about the future of ABC Learning and has set up a task force to work through contingency plans to protect the families that use the childcare service.
But Finance Minister Lindsay Tanner has ruled out a government takeover of the business.
“I wouldn’t imagine we would be directly running them,” Tanner told Fairfax Radio Network.
Trading in ABC’s shares has been suspended since Aug. 21 as the company worked to resolve its debts. The shares last traded at 54 cents.
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