TENS of thousands of parents who rely on ABC Learning Centres to mind their children, and thousands of staff, will be facing an uncertain future today with the company expected to call in the corporate paramedics.
ABC’s management, who had been locked in negotiations yesterday, were expected to hand control of 1200 centres throughout Australia and New Zealand to its administrators, Ferrier Hodgson.
The Federal Government has tried to reassure parents that any collapse would not result in widespread closures and that it could step in to keep centres running.
The Education Minister, Julia Gillard, said a child-care industry taskforce would look at ways to help centres stay open if necessary.
Penny Roost, a parent with two children at the ABC Learning Centre in Willoughby, said yesterday she feared she would not be able to find a place for her youngest son, Dylan, if the centre closed.
Her elder child will go to school next year, but the other has only recently started at child care.
"I hope they don’t close, because they’re fantastic," Mrs Roost said. "They’re loyal and they really care about the kids."
Mrs Roost said she was worried that she would struggle to start back at work and would disturb the two-year-old when he was happy.
"There’s probably no other option, to be honest," she said of finding another child-care place. I have got friends who were looking for months and months. There’s not really any options – they’re pretty tight.
"I would like to go back to work part-time but obviously that depends on whether he has a spot. Dylan only just started and he’s loving it: he’s thriving. I don’t want to disrupt him at all."
ABC was once the largest publicly listed child-care operator in the world and benefited from government child-care subsidies that provided nearly half its annual earnings.
But it has been struggling for survival since February when it revealed that its half-year earnings had fallen 42 per cent because it was no longer including payments made to it by property developers.
Without these payments, the child-care licences and revenues from its centres were not as high as they had been in previous years.
In the past five months ABC has tried to avoid collapse by selling assets, among them its British business Busy Bees Childcare and the majority stake in its US business. But this has not been enough.
The company founded by the entrepreneur Eddy Groves was not so much a victim of the financial crisis as of a decision to include third-party payments from property developers and others in its accounts, which appeared to have artificially inflated its earnings.
The payments were similar to "rental guarantees" in that they guaranteed enrolment levels at ABC’s centres even when centres were not full. Mr Groves, the former chief executive, and his wife Le Neve, from whom he is separated, once had ABC shares worth $325 million. Now the pair have 16,000 shares which are worthless. The two were dumped from the company in late September.