Keeping cash afloat: banks, retailers offer Armaguard cash delivery lifeline

Already a subscriber?The major banks and some of the country’s largest retailers have extended a last-minute lifeline to Armaguard in a bid to keep the Lindsay Fox-owned cash transport firm alive.

Armaguard acquired its main competitor, Prosegur, last year in a deal waved through by the competition regulator. Months after that transaction, the company admitted that it was sustaining heavier-than-expected losses as the use of cash to make payments continued to plunge, reducing demand for cash deliveries.

The banks have been keen for a deal before Easter, due to the looming expiry during the first week of April of a cross guarantee between Armaguard and Linfox. The end of the guarantee would allow Armaguard to enter voluntary administration without triggering contractual obligations on the rest of the Linfox, a major transportation group.

Leading up to the deal, the banks agreed not to enforce obligations under existing contracts, which has allowed Armaguard to cut operating costs by reducing the number of deliveries, and the amount of money it needs to count each day, which have helped to reduce the cash flow crunch on the business.

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