ABC Learning
The voluntary administration of ABC Learning Centres created a unique and
challenging situation for parents, communities and the child care sector. In
managing this situation, the Australian Government placed the interests of
parents, their children and ABC Learning employees front and centre in offering
stability and help to ensure parents could continue to access child care.
When ABC Learning entered voluntary administration on 6 November 2008, the
Government acted swiftly to provide information to parents, staff and the
community about the evolving situation and provided funding so that all centres
could continue to operate while the ABC Receiver undertook the necessary
operational reviews.
The Government established an orderly, logical process for working through
the problem with the primary focus on continuity of care for the children
involved.
In December, the ABC Receiver, McGrathNicol, confirmed that 720 centres would
continue to operate into 2009 and decided to close 55 ABC Learning Centres. The
Government worked closely with the Receiver to ensure that children at those
centres had alternative child care options close by and that the majority of
staff could continue to work at other ABC Learning Centres or, with the
assistance of the General Employee Entitlements and Redundancy Scheme (GEERS),
receive protection for their employee entitlements.
The Government then acted to keep open the ABC Learning Centres that the ABC
Receiver deemed unviable under the ABC business model, now known as ABC2 Group.
The Government believed that many of these centres represented an opportunity to
gain greater diversity in the child care market.
On 18 December 2008, the New South Wales Supreme Court appointed Stephen
Parbery and Daniel Bryant of PPB Corporate Recovery (PPB) as the new Court
Appointed Receivers (CAR) over ABC2 Group. PPB, with assistance from the
Government, looked at a range of sustainable options for ABC2 Group child care
centres, including their transfer back to landlords, sale to new owners or, in
some cases where possible, the transfer of children to suitable alternative
arrangements.
On 9 December 2009 the Receivers for ABC Learning Limited, McGrathNicol,
announced that GoodStart is the preferred purchaser for the majority of the
remaining ABC1 child care centres.
GoodStart is a consortium of not-for-profit entities including Social
Ventures Australia, Mission Australia, the Brotherhood of St Laurence, and the
Benevolent Society. Together, these organisations have committed to providing
the highest quality, socially inclusive, accessible and affordable child and
early childhood education for Australia's children.
It is anticipated that sale agreements will be finalised and contracts
exchanged in either December 2009 or January 2010. The completion of the sale
and the transfer of the centres to their new owner/s is anticipated to be early
in the new year.
Latest News
24 March 2009
Negotiations between the new operator, GoodStart, and the landlords for the
reassignment of the existing site leases are continuing.
It is hoped that settlement and transfer of the first tranche of centres
will occur in the April, and the remainder will settle over the coming months.
A small number of centres were not included in the sale to GoodStart. The
receiver has been working to identify suitable purchasers for these centres. New
operators have now been secured for the majority of these centres, and
negotiations with parties interesting in buying the few remaining unsold centres
are progressing well.
9 December 2009
The Receivers for ABC Learning Limited, McGrathNicol, have announced that
GoodStart is the preferred purchaser of the majority of the remaining ABC1 child
care centres. GoodStart has been established by four non-profit organisations
including Social Ventures Australia, Mission Australia, the Brotherhood of St
Laurence, and the Benevolent Society.
Together, these organisations have committed to providing the highest
quality, socially inclusive, accessible and affordable education and care
programs for Australia's children.
The Australian Government has agreed to loan GoodStart $15 million to assist
its acquisition of the centres.
It is anticipated that sale agreements will be finalised and contracts
exchanged in either December 2009 or January 2010. The completion of the sale
and the transfer of the centres to their new owner/s is anticipated to be early
in the new year.
For more information about the sale of the remaining ABC1 child care centres,
please contact the Receiver's hotline on 1800 222 543 between 9:00am and 6:30pm
(AEDT). For regular updates on ABC1 centres, please visit
www.childcare.com.au
or contact your local centre.
Further information can be found in the
Ministers' media release.
15 September 2009
The future of all ABC2 Group centres has now been resolved. This process was
successfully completed in September 2009. The final status of all ABC2 centres
can be viewed on the
PPB website.
236 have successfully transferred to new operators, including 21 Department
of Defence centres.
Regrettably, suitable buyers could not be found for 22 centres, 19 of which
have now closed. The final three centres are scheduled to close on 18 September
2009, if no viable offer for their purchase is made. An additional four centres
have closed due to circumstances beyond the control of the receiver. Families
affected by these closures have been given information to assist them to locate
alternative care.
Over 85% of employees in these centres have secured employment with the new
operators or in other ABC centres. Those that were unable to secure ongoing
employment have been assisted to access their entitlements through the
Government funded General Employee Entitlements Scheme.
ABC2 Group centres were sold to 78 different operators, bringing greater
diversity into the Australian child care sector. 34 of these former ABC centres
are now operated by not-for-profit organisations.
ABC2 Centre Summary (at 15 September 2009)
| New Operator Confirmed |
215 |
82.1% |
| Defence Centres sold |
21 |
8.0% |
| Centre closed by Receiver |
22 |
8.4% |
| Centres closed for other reasons |
4 |
1.5% |
| TOTAL |
262 |
100% |
In the meantime the ABC Receiver, McGrathNicol continues to manage 705 ABC
Learning centres which remain with the original receivership. On 31 August 2009,
McGrathNicol announced the commencement of a sale process for these centres,
with the intention that all centres will have transferred to new ownership by
early 2010. Families and employees will be informed of the outcome of this
process for their centre.
Specific questions concerning the management and operation of ABC centres should
be directed to the receiver's hotline on 1800 222 543. Regular updates for
families and ABC Learning employees will be provided by ABC Learning's receiver
on the Childcare Website.
15 May 2009
The Court Appointed Receivers (CAR) for the ABC2 Group, Stephen Parbery and
Daniel Bryant of PPB, have today reported that the transfer of ABC2 centres to
new operators is continuing. The smooth transition of centres to new operators
is now occurring on a daily basis without disrupting the existing care
arrangements of families.
It is expected that more than 210 centres will continue with new operators.
The Government is continuing to support these centres while the sales process
is completed to ensure continuity of care for children and provide some
certainty for parents and employees.
PPB now expects that only around 16 centres will close, down from the
expectation, on 15 April 2009, that 19 centres would need to close.
Sufficient alternative long day care places have been found in nearby centres
to ensure all of the affected families have had the option of care in their
local area.
PPB has continued to explore sustainable options for the eight centres that
did not receive acceptable bids as part of the Expression of Interest process
and where no alternative child care places had been identified.
Buyers have been found for two of these centres and they will now continue to
operate under new owners. A third centre from this group, ABC Boulder in WA
recently closed as sufficient alternative places became available in the local
area.
The Government is pleased that more than 85 per cent of employees working in
ABC2 centres will be retained by the new operators or redeployed to other ABC
centres.
PPB is continuing to keep in close contact with parents and staff in centres
to update them on progress and is confident that all transfers will be
successfully concluded over the next few weeks.
The current status of all ABC2 centres is regularly updated on the
PPB website.
15 April 2009
Today the Court Appointed Receivers (CAR) for ABC2 Group, Stephen Parbery and
Daniel Bryant of PPB, announced the outcome of the Expression of Interest
process for the 241 centres in ABC2 Group.
The vast majority of these centres are to continue with new operators.
Operators have been selected for 210 centres. With respect to 193 of these,
operators have signed contracts and these are listed at
www.ppb.com.au/site/abc.
Negotiations for the sale of a further 17 centres are close to finalisation and
PPB is confident that these centres will continue to operate.
Regrettably, for 19 services a suitable buyer could not be found. These
services will close by 15 May 2009. Sufficient Long Day Care places have been
identified in nearby centres to ensure all families have the option to secure
alternative care in their local area. Families will be informed of these options
in writing.
For a further eight services suitable alternative care is not available in
the local area. PPB will continue to investigate possible solutions for these
centres over the next month. It is still possible, however, that these centres
may have to close in June 2009.
All employees affected by centre closures will be given information relating
to their individual circumstances in the near future.
The outcome for each individual ABC2 Group centre is available on the PPB
website at
www.ppb.com.au/site/abc.
ABC2 Expression of Interest - Centre Summary by State (at 15 April 2009)
| New Operator Confirmed |
74 |
2 |
34 |
11 |
1 |
61 |
10 |
193 |
| New Operator Identified - Negotiations Continuing |
7 |
0 |
2 |
0 |
0 |
3 |
5 |
17 |
| Centre Expected To Close - Alternative Care Available |
8 |
0 |
0 |
0 |
0 |
8 |
3 |
19 |
| No Operator Identified - To be Resolved |
0 |
0 |
0 |
0 |
2 |
4 |
2 |
8 |
| TOTAL |
89 |
2 |
36 |
11 |
3 |
76 |
20 |
237 |
13 March 2009
The Court Appointed Receivers (CAR) for ABC2 Group, Stephen Parbery and
Daniel Bryant of PPB, today announced that they have requested that the
Australian Government approach the NSW Supreme Court to seek a short
continuation of the CAR's appointment until 15 May 2009. No additional
Government funding is required for this extension.
The Government has welcomed the announcement by the CAR and is pleased that
the sale and transfer process for the centres under its control is progressing
well.
The CAR has commenced exchanging contracts for the sale of the first tranche
of 65 centres.
This means that these centres are likely to be transferred to new sustainable
operators in the near future, subject to licensing and other normal processes
being completed.
PPB is also confident that they can progressively secure new operators for
most of the remaining centres in the coming weeks.
Due to the number and complexity of offers received, and multiple
stakeholders involved; PPB sought a one-off continuation of their appointment
for six weeks.
The complexity of the Court Appointed Receivership is reflected in the fact
that they are dealing with over 180 bidders whose bids relate to leases held by
over 100 landlords.
The Government has agreed to continue to fund losses during this period, up
to 15 May 2009, drawing from unused funds in the existing $58 million
commitment.
PPB has also made it clear that it may not be possible to find suitable
operators for all of the centres. If this is the case, the Government will work
closely with PPB to ensure that as far as possible, alternative care is
available for any families who need it.
The Government is aware that this is an anxious time for the families and
employees of these centres.
PPB has undertaken to announce the final outcome for all centres no later
than 15 April 2009.
PPB will continue to keep parents and employees regularly informed throughout
this process and will be writing to them shortly to update them on progress.
More information can be found on PPB's website at
www.ppb.com.au/site/abc
5 February 2009
ABC2 Group's Court Appointed Receiver (CAR), PPB Corporate Recovery (PPB),
has announced today that 470 parties have submitted non-binding offers for the
Government-supported ABC Learning centres.
ABC2 Group comprises the 262 child care centres which were previously under
the control of ABC Learning Centre's Receiver, McGrathNicol, and which were
judged unviable under the ABC business model. It also includes 13 centres that
were labelled as ABC centres and were previously operated by 123 Operations.
On 14 January, PPB commenced a formal Expression of Interest process under
which interested buyers needed to demonstrate that they could provide high
quality, long-term child care in a safe environment. As part of this process,
interested buyers have been alerted to the requirements they will need to meet
in order to secure a license.
By 21 January, PPB had received more than 600 formal expressions of interest
from a diverse range of parties.
Interested parties were then provided with more detailed information on the
centres and PPB indicated whether they believed the offers met the requirements.
A total of 470 non-binding offers were then submitted by 31 January.
The continuing strong interest clearly demonstrates that the market believes
that there is a viable future for many of these centres.
PPB will now determine which of the interested parties will be shortlisted,
having regard to the selection criteria and their duties as Court Appointed
Receiver. Shortlisted parties will be given access to more detailed information
on the centres and will be invited to participate in Phase 2 of the process by
submitting formal (binding) offers by 25 February 2009.
PPB will also be considering whether there are some circumstances where the
best option is to transfer children to nearby centres.
ABC2 Group centres will continue to operate as normal through until 31 March
2009 where necessary. PPB, with assistance from the Government, is aiming to
resolve the future of all centres under their control by 31 March 2009.
Further details on the Expressions of Interest process is available at:
www.ppb.com.au/site/abc
14 January 2009
On 14 January 2009, the Court Appointed Receivers of the ABC2 Group, Stephen
Parbery and Daniel Bryant of PPB Advisory (PPB) announced the commencement of an
Expression of Interest (EOI) process for parties interested in obtaining those
child care centres which form part of the ABC2 Group child care centres.
ABC2 Group comprises 228 child care centres which were previously under the
control of ABC Learning Centre's Receiver, McGrathNicol, and which were judged
unviable under the ABC business model. It also includes 13 centres that were
labelled as ABC centres and were previously operated by 123 Operations.
The Australian Government has made up to $34 million available to keep the
241 child care centres open until 31 March 2009.
Newspaper advertisements calling for EOI were placed in all major
metropolitan and regional press on14 January.
PPB will be applying rigorous selection criteria against which they will
assess all EOIs. Interested buyers must be able to meet appropriate
accreditation and licensing requirements and be able to demonstrate that they
can provide high quality, long-term childcare in a safe environment.
The criteria will also emphasise greater diversity in long day care provision
in Australia by encouraging organisations of different sizes and character and
including not-for-profit organisations.
A demonstrated commitment to adopt leading-practice employment approaches, as
indicated by preparedness to take on accrued employee entitlements of former ABC
employees will also be seen as desirable as part of the short-listing process.
PPB will work quickly to establish the best way forward for each individual
centre and will keep parents, staff and centre directors informed of
developments.
Expressions of interests must be lodged by 21 January 2009 via email to
abc2.expressionsofinterest@ppb.com.au.
Parties who have previously expressed interest to either McGrathNicol or PPB
are not required to respond again. PPB will be in contact to advise on the next
step of the process.
The Government will continue to work closely with PPB to ensure the outcome
of the EOI process delivers a high quality and sustainable child care service
for Australian families, with a market structure that is characterised by choice
and diversity.
Further information on the EOI process including a detailed Fact Sheet can be
found on www.childcare.com.au and
www.ppb.com.au/site/abc. The Facts
Sheet includes information on the expected EOI timelines.
18 December 2008
On 18 December 2008, the New South Wales Supreme Court appointed Stephen
Parbery and Daniel Bryant of PPB Corporate Recovery (PPB) as the new Court
Appointed Receivers over:
- 228 childcare centres previously under the control of ABC Learning
Centres Receiver, McGrath Nicol; and
- 21 centres owned and leased by the Department of Defence. These centres
will continue to operate with Government support while new management
arrangements are determined.
The Australian Government sought this appointment following ABC Learning's
Receiver, McGrath Nicol's announcement of the findings of its operational review
last week.
McGrath Nicol will transfer the 249 childcare centres to the control of a
fully owned subsidiary to be known as ABC2 Group effective from January 1
2009.
In addition, a further application is expected to be made by the Australian
Government to have the 13 ABC Learning branded child care centres, owned by 123
Operations, transferred to be under the control of this Receivership. These 13
centres were included in the group of centres identified as unviable in McGrath
Nicol's announcement of 10 December.
The childcare centres in the ABC2 Group will continue to operate with
financial assistance from the Australian Government into the New Year and, if
necessary, until 31 March 2009.
PPB will now look at a range of sustainable options for ABC2 Group childcare
centres, including their sale to new owners or, in some cases, the transfer of
children to suitable alternative arrangements.
This will include reviewing all submissions from parties who have expressed
an interest to date in ABC Learning's childcare centres.
In the New Year, PPB will initiate a second round of expressions of interest
to gain a better understanding of the centres. This will give the opportunity,
if necessary, to provide additional information and seek new EOI submissions.
10 December 2008
On 26 November 2008, ABC Learning's Receiver identified that 656 ABC Learning
centres would continue to operate in 2009, and that 386 ABC Learning centres
would remain under review.
The Receiver has now identified 64 additional centres that will remain a part
of the ABC business.
It is now up to the Receiver to determine the way forward for the 720
profitable centres.
The Receiver also announced that 55 ABC centres are to close from 1 January
2009. Parents are being offered places in nearby profitable ABC centres or, in a
small number of cases, centres run by other providers with available places.
Of the remaining centres:
- 21 centres owned and leased by the Defence Department will continue to
operate with Government support while new management arrangements are
settled
- 5 centres are not owned by ABC Learning but by CFK (4) and Neighbourhood
Early Learning Centres (1). These should not have been included in earlier
listings, and
- 241 centres are considered unviable under the Receiver's ABC Learning
business model.
Under the Corporations Act 2001, Section 420A, the Receiver has an
obligation to maintain the value of the assets. This means that, under normal
circumstances, the 241 unviable centres would be closed.
It is unacceptable to the Government for this large number of centres to
close at short notice without suitable alternative options being identified for
all of the children in those centres.
These 241 centres could be viable under different management and represent an
opportunity to achieve greater diversity in the child care market. Therefore,
the Australian Government will be making an application to the NSW Supreme Court
for a Court Appointed Receiver to be installed to work closely with the
Government, landlords, staff and parents to ensure continuity of care for
children in these centres.
To support this process, the Australian Government will provide up to $34
million of additional funds to keep these 241 centres open into the New Year
and, if suitable alternative arrangements cannot be made, through until 31 March
2009.
This will give those parents further security while the Government and key
stakeholders move into phase two of finding a sustainable child care solution
for working parents impacted by the collapse of ABC Learning.
A summary of the status of the ABC Learning child care centres is set out in the following table:
| Continuing to trade ABC Centres |
656 |
| Centres remaining under review |
386 |
| Total centres |
1042 |
| Previously announced continuing to trade centres |
656 |
| Newly announced continuing to trade centres (includes 15 where Defence staff have priority access and 6 Corporate Care centres) |
64 |
| Total centres in ABC Learning's new business model |
720 |
| Department of Defence owned and leased centres managed by ABC Learning |
21 |
| Centres requiring Australian Government support to continue (includes 13 that are managed by ABC Learning but are owned by 123 Operations). |
241 |
| Total centres be supported by the Australian Government |
262 |
| Centres that will close and merge with continuing centres |
55 |
| 4 CFK centres and 1 Neighbourhood Early Learning Centre that were incorrectly identified on ABC Learning's books for the initial announcement |
5 |
| Total centres not continuing via ABC or the Government |
60 |
| Total centres - all groups |
1042 |
The Receiver has provided a full list of ABC Learning centres, and their
status, on ABC Learning's web site -
www.childcare.com.au.
5 December 2008
ABC Learning's Receiver, Chris Honey of McGrath Nicol, has made a further
announcement today about the future of ABC Learning. Please follow this link to
read the complete announcement -
www.childcare.com.au
26 November 2008
ABC Learning's Receiver, Mr Chris Honey of McGrath Nicol, has written to ABC
parents and staff today confirming that a majority of the Group's childcare
centres will continue operating in 2009.
The Receiver has identified that 656 ABC Learning centres will continue to trade
as normal in 2009. This is a welcome development for thousands of parents and
ABC Learning staff around the country.
This represents almost two thirds of all ABC Centres, which provide care for
80,000 Australian children, or more than 70% of children in ABC Learning
centres.
The Government will continue to work closely with the Receiver to ensure
continuity of care for children at the ABC Learning centres that remain under
review.
Our first priority is to ensure the children at those ABC centres continue to
have access to stable, quality care. We understand that parents and employees at
these centres need clarity about their situation as quickly as possible.
ABC Learning's Receiver, McGrath Nicol, expects a proportion of these centres
will stay open but needs more time to examine the centres in more detail so that
the correct decision is made on their future.
The Receiver says he expects to make a further announcement in respect of these
centres in a week's time. It is important that parents remember that all ABC
Learning centres will continue to operate at least until 31 December and a large
majority will remain open in 2009.
The Receiver has provided a full list of ABC Learning centres, and their status,
on ABC Learning's web site -
www.childcare.com.au.
19 November 2008
The operator of up to 43 childcare centres in NSW, CFK Childcare Centres Ltd,
has gone into voluntary administration.
The CFK board appointed BDO Kendalls as voluntary administrators on Tuesday
18 November.
The CFK board said it would work with the administrator with a view to
keeping open as many centres as possible.
CFK hopes expressions of interest in some if its centres will result in some
being bought by third parties.
The Administrator has advised that CFK centres are open.
Parents are advised to contact their local centre for further information.
Please note: CFK Childcare Centres Limited should not be confused with the
Creche and Kindergarten Association of Queensland (more commonly known as C&K).
A media release from C&K further
clarifies the current position of C&K.
11 November 2008
ABC Learning's Receiver, McGrathNicol, has commenced an Expression of
Interest process encouraging parties to register their interest in the future of
ABC Learning centres.
The Receiver is collating all expressions of interest to ensure they have the
best available range of options for considering the future operation of ABC
Learning centres.
Expressions of interest should be forwarded to Marco Poelzl at the receiver:
mpoelzl@mcgrathnicol.com
For guidance about the Expression of Interest process, please contact the
receiver's hotline on 1800 222 543, this hotline will operate between
9:00 and 6:30pm (AEDT).
7 November 2008
The Australian Government has the interests of parents, their children and
ABC Learning employees front and centre in wishing to offer immediate stability
and help ensure continuity of service.
That's why the Australian Government has committed up to $22m conditional
funding to ensure that all ABC Learning child care centres remain open and
providing care until 31 December 2008.
The $22m represents the possible costs of supporting the continued operation
of unprofitable ABC centres for two months and will allow the receivers to go
through in an orderly transition phase. This represents around 40% of ABC
centres.
The receiver will continue to work closely with the Australian Government to
undertake a thorough review of ABC Learning's operations and work out a way
forward for 2009.
By mid December, it is envisaged that the Australian Government will be in a
position to make a further announcement about the future of ABC Learning child
care centres.
6 November 2008
The Australian Government has welcomed the receivers of ABC Learning Centres,
McGrath Nicol, commitment to keeping the child care centres open and that they
would continue to operate as usual.
The Government has been in discussions with creditors, particularly the
banking syndicate of international and Australian banks who have appointed the
receiver, to support continuity of service delivery to provide some comfort to
parents and employees.
This is a unique situation because ABC Learning is the largest private child
care provider in the country with approximately 120,000 children attending
around 1,100 child care centres that employ more than 16,000 people.
The Child Care Industry Taskforce, in the Department of Education, Employment
and Workplace Relations, is working closely with the administrator, Ferrier
Hodgson, and the receiver, McGrath Nicol.
The Australian Government continues to support families to access child care
by providing subsidies through the Child Care Benefit and the Child Care Tax
Rebate.