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ABC centres set to close -

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ABC centres set to close

The World Today - Wednesday, 10 December , 2008 12:38:00

ELEANOR HALL: After weeks of uncertainty the receivers at ABC learning, have announced that 55 of
the company's childcare centres will close, and the future of a further 241 centres are in doubt.

The Federal Government says it will appoint its own receiver and will keep the centres open for

The receivers say the outcome is in fact far better than they expected.

Annie Guest was at the receivers' announcement in Brisbane and she joins us now.

So Annie, what does the closure of these 55 centres mean for the parents and the staff?

ANNIE GUEST: Eleanor, about 4,000 children are enrolled at those 55 centres, and the receiver,
Chris Honey of McGrathNicol today said that they'll all be offered places at other ABC centres
within about a 2.5 kilometre radius.

About 80 per cent of the staff at those 55 centres will keep their jobs into next year, and about
100 will lose their jobs.

Now in terms of their entitlements which we've heard a lot of in recent weeks, there's still no
word and that's expected to be part of the Federal Government's announcement this lunchtime.

ELEANOR HALL: And what will the Federal Governments announcement mean for the other 241 centres?

ANNIE GUEST: Julia Gillard is making that announcement at the moment, and The World Today
understands that she is saying that the 20,000 children enrolled at that 241 centres will keep
their places in the short term, because the Federal Government is going to appoint, there will be a
court appointed receiver to oversee those 241 centres.

Now we understand that the receiver Chris Honey of McGrathNichol. came to the conclusion that they
were unviable and that's when the Federal Government stepped in.

ELEANOR HALL: And so the Federal Government will be putting more money in?

ANNIE GUEST: Yes, now we understand that Julia Gillard is going to make an announcement on money
this lunchtime, and that she'll say that the Federal Government wants to find a way to keep these
open at least in the short term.

She's believed to be of the view that there were no options for these parents, and that the Federal
Government saw that there was an opportunity for the Government to have more diversity in the
marketplace and it was going to pursue that.

Of course, ABC Learning was, is the biggest private operator in the market with 25 per cent, it had
25 per cent of Australia's child care places.

ELEANOR HALL: Annie, it's interesting that the receivers said this outcome, with 55 centres closing
and 241 being unviable, was better than they expected; how did they explain that?

ANNIE GUEST: They said that five weeks ago they couldn't have imagined that this would be the
outcome, that it had been a very complicated corporate collapse, and that the process, that they
had been very dependent on Government support and bank support.

We understand that Australia's four big banks are all exposed to ABC Learning, and have continued
their lines of credit. So really the situation without that Government support, particularly today
that we're going to hear more about, would be a lot worse, with perhaps those 241 centres closing
on top of the 55, which amounts to about eight per cent of Australia's childcare places.

ELEANOR HALL: Annie Guest in Brisbane thank you.