Coles resumed half cash withdrawal limits among Armguard's crisis

Australian supermarket Coles has resumed half cash withdrawal limits due to fears of Armaguard collapse. Armaguard is the largest money transfer provider company in Australia.

Coles has announced it would continue to decrease cash withdrawal limits across its locations as the future of the money delivery sector, Armaguard is at risk as more customers and companies are abandoning physical currency.

Coles halves cash withdrawal limit in supermarkets amid fears of Armaguard collapse https://t.co/pXbbRJqZNo
— Guardian Australia (@GuardianAus) March 28, 2024

However, Coles has resumed half cash withdrawal limits from $400 to $200 after Armaguard secured emergency funding from its parent company Linfox to continue operations.

Coles was the first major retailer to suspend money deliveries due to concerns that cash orders might become trapped in trucks if Armaguard failed.

Coles spokesperson said they can confirm that normal cash collection and processing services from Armaguard have resumed. Hence, customers can continue to pay and withdraw cash from Coles supermarkets and liquor stores this weekend and beyond.

Linfox-owned Armaguard warned late last year that its business model was unsustainable owing to declining demand for actual currency. It urged emergency discussions with leading banks and merchants of Australia.

Meanwhile, Armaguard rejected a $26 million rescue package from major banks and retailers. They expressed reservations about the bailout’s terms. A bailout is a condition when the government or any particular organization provides to a financially troubled company that could go bankrupt.

However, Linfox will invest $10 million in its money distribution business. It will ensure continued deliveries while it pursues a long-term solution.

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Mick Cronin, CEO of Armaguard, stated company was working with clients and stakeholders on financial solutions. Armaguard continues to operate its full suite of services. They are confident that over the coming months, it will get the business on to long-term sustainability with appropriate support from the industry.

Australian Bank and Association (ABA) directed negotiations on behalf of banks and retailers to offer a $26 million rescue package.

ABA CEO, Anna Balig said a generous cash offer was conditional on reasonable terms. It included Armagaurd disclosing financial information to allow all stakeholders to develop an appropriate model.