$50m injection to prop up cash mover Armaguard

Big Four Banks and supermarkets have agreed to a $50 million, 12-month rescue deal for struggling cash-transportation firm Linfox Armaguard to restructure its business and keep cash flowing through the economy.

The new agreement has been submitted to the competition regulator and was finalised at the weekend, giving Armaguard much-needed funding for a year from July 1 that will be subject to monthly performance targets.

“This deal will keep cash moving around the country and ensure it remains available to Australians wherever they live,” Australian Banking Association chief executive Anna Bligh 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,” Ms Bligh said.

The issue of cash services to businesses hit near-crisis levels before Easter amid concern for Armaguard’s long-term viability, a private company owned by trucking billionaire Lindsay Fox. There has also been concern people and businesses might have to make do without access to notes and coins, which currently account for about 7 per cent of payments in Australia.

The rescue talks were held on behalf of Commonwealth Bank of Australia, ANZ, Westpac and National Australia Bank by the Australian Banking Association and also involved retailers Wesfarmers, Woolworths and Coles, as well as Australia Post and the Reserve Bank of Australia.

It comes months after Armaguard rejected a $26 million bailout offered by the same consortium earlier this year, who want to keep the cash transport industry economically viable by finding ways to improve efficiencies and keep costs down.

At the same time, the business faces the uphill battle of operating in a society that still uses cash, but far less than it used to.

Linfox Armaguard executive chair Peter Fox said it was “not a contest between the parties” and there were “no winners and losers”.

“No other nation has major banks, retailers and key distribution companies working together to achieve a more efficient Cash-in-Transit industry,” he said.

Mr Fox said the company would also be drawing on the expertise of fellow cash logistics company and shareholder Prosegur, which it merged with in 2023.