Parents reassured over ABC childcare

(AAP) ABC Learning Centres' childcare operations around Australia will continue as normal despite the company being placed in receivership, parents have been assured.

The troubled childcare giant's board of directors on Thursday appointed insolvency
firm Ferrier Hodgson as voluntary administrators while creditors appointed corporate
advisory firm McGrathNicol as receivers and managers.
McGrathNicol partner Chris Honey assured parents the company's 1,000-plus child care
centres in Australia would continue to operate, at least for the time being.
"I can reassure parents that the child care centres will open tomorrow and they will
be open Monday, and while the process is continuing we will be continuing to ensure
than parents have access to ABC child care centres," Mr Honey said.
"As far as we are concerned, at the moment it is business as usual."
Deputy Prime Minister Julia Gillard welcomed the assurance and said the government
was working closely with receivers and creditors to ensure parents would not be
affected by the company's woes.
"The government's priority is to ensure working families reliant on ABC Learning can
continue to access child care for their children and ABC Learning employees have
some immediate stability," she said.
She said the company would benefit from more than $300 million in federal government
funding this financial year.
Mr Honey said the receivers would undertake a detailed review of the company and its
operations but believed there was a future for the business.
He said he was not currently considering selling off ABC Learning's assets, despite
receiving approaches from potential buyers.
"We are not talking to potential buyers at the moment - our main focus is to provide
that level of reassurance to staff and parents, that there will be that ongoing
level of child care."
ABC Learning, which cares for about 120,000 children - 25 per cent of the Australian
child care market - is believed to be struggling with debts of more than $1 billion,
mostly owed to Australia's big four banks.
Westpac revealed it had a $200 million exposure to ABC Learning, ANZ announced it
was owed about $180 million, and the NAB said it was owed about $140 million.
The decision to appoint administrators comes after the company missed four deadlines
to report on its 2007-08 accounts to the Australian Stock Exchange.
Shares in the Brisbane-based company, which started with one centre in 1988,
plummeted in February after it revealed a 42 per cent drop in profit for the first
half of the financial year.
The spectacular plunge forced founders Eddy and Le Neve Groves to sell their shares
in the company, and Mr Groves was removed as CEO in September.
ABC Learning shares had fallen to 54 cents, down from a record $8.80 in 2006, when
trading was suspended in August.
The federal government announced that a hotline - 180 2003 - will be available to
provide basic information to parents and employees.
Further information is available on the mychild.gov.au website.
Finance Minister Lindsay Tanner earlier said the federal government would not be
involved directly in running the childcare centres.
"I wouldn't imagine we would be directly running them," Mr Tanner told Fairfax Radio
Network.
"Clearly one of the key things we have got to do is to make sure we minimise
disruption to people with arrangements."
The childcare sector's peak body says the ABC Learning centres are likely to be
targeted for acquisition by rival providers.
Childcare Associations Australia says private and community operators are likely to
express interest in acquiring ABC Learning's operations.
"CAA expects that both independent private and community providers with a strong
track record in quality provision would have an interest in acquiring ownership or
management of existing services," it said.
"CAA's preference would be that this occurs in small regional clusters of services".
The alternative was for government or corporations to administer the centres, it said.
The childcare workers' union says the federal government must ensure the 1,200
childcare centres run by ABC Learning remain open and staff receive all their
entitlements.
The Liquor, Hospitality and Miscellaneous Union (LHMU), which represents childcare
workers, said ABC was too big a player in the childcare sector to leave its future
to market forces.
LHMU national secretary Louise Tarrant said ABC Learning was so big it had become
part of the economic infrastructure, warning the impact would be huge if its centres
had to be shut down.
"When you look at the fact that we've got 100,000 children in child care in ABC
Centres, that means there are tens and thousands of people who rely on that service
(in order) to go to work every day," Ms Tarrant told reporters.
"It is such an icon company and this is such an icon service, it's a key part of
economic infrastructure. It needs more than a quick solution."
Ms Tarrant called on the Rudd government to be actively involved in the
administration process to ensure all 1,200 child care centres remain open.
"What we would ask the government at this stage to do is to ensure with the
receivers and the administrators that there is continuity of provision of service
and employment for workers," Ms Tarrant said.
"We absolutely want the government to guarantee that we've got entitlements and
security of employment for workers."
"We've been told that centres are going to stay open and jobs will be maintained.
Our question is, for how long and for what level of entitlements and conditions?"
she said.
"It's all very well to have a job, but you want to make sure that you are going to
be able to access entitlements and savings be able to take leave over Christmas.
"There is a lot of concern. There is a lot of worry and insecurity amongst the
workforce and amongst families."