Nov. 7 (Bloomberg) -- ABC Learning Centres Ltd., seized by lenders after the credit crisis forced up interest payments, owes Australia's four biggest banks A$762 million ($507 million).
Commonwealth Bank of Australia, the nation's largest mortgage provider, said today it loaned ABC A$240 million, joining National Australia Bank Ltd., Australia & New Zealand Banking Group Ltd. and Westpac Banking Corp. in disclosing the amount of credits extended to the struggling company.
ABC Learning, which looks after one in three Australian children in daycare at almost 1,100 centers, joins Allco Finance Group as the nation's second publicly traded company to appoint outside managers this week. The government today pledged as much as A$22 million to keep the business running until the end of the year, saying about 40 percent of the centers are unprofitable.
``This arrangement ensures that ABC centers around the country will be working and be providing business as usual care until Dec. 31,'' Deputy Prime Minister Julia Gillard told reporters in Melbourne today. ``The data from the receivers is that in total there are 1,048 ABC childcare centers and a significant proportion are unprofitable.''
Commonwealth said the A$240 million in senior debt was in addition to the A$100 million provision the bank took in August against ABC's 4.46 million listed hybrid notes. The notes were worth A$220 million, Commonwealth said in today's statement.
NAB, Westpac, ANZ
National Australia, the nation's biggest bank by assets, may adjust provisions for bad debts after it loaned A$140 million, it said in a statement today. ANZ, whose stock is the worst- performing among Australian lenders this year, said yesterday the child-care operator owes it A$182 million. Westpac, the second- biggest lender by market value, has A$200 million at risk.
Commonwealth's shares rose 0.7 percent to A$40.07 at the close in Sydney, National Australia dropped 10 percent to A$22.15, ANZ declined 3.9 percent to A$16.29 and Westpac was unchanged at A$21.
ABC appointed outside managers from Ferrier Hodgson yesterday. Lenders named McGrathNicol & Partners as receiver to 38 divisions of the business yesterday.
``We take seriously the impact which this difficulty that this company is experiencing has on working families right across Australia and the employees,'' Prime Minister Kevin Rudd told reporters in Sydney. ``The difficulties of this company has experienced, which resulted in the administrator being called in, is a major, difficult development for those families affected.''
Quadrupled Centers
Former ABC Chief Executive Officer Eddy Groves, who left Sept. 30, borrowed to expand in the U.S. and U.K., almost quadrupling the number of centers the company operated in 2 1/2 years.
ABC Learning's total debt as of June 30, 2007, was A$2.2 billion, compared with A$111 million at the end of fiscal 2004. The company hasn't filed annual results for the year ended June 30, 2008.
Commonwealth Bank is also owed A$170 million by Allco, the Sydney-based asset manager that appointed Tony McGrath and Joseph Hayes of McGrathNicol as voluntary administrators on Nov. 4. Allco's market value was cut by 98 percent this year before share trading was halted pending the appointment of the administrators.
Westpac said Allco owes it A$200 million, and may adjust its provisions for bad debts. ANZ said yesterday it was owed an ``insignificant'' amount.
National Australia this year wrote down its A$110 million margin loan facility with Allco Principals Investments, a related company, spokeswoman Kerrina Lawrence said yesterday. It is not a lender directly to Allco Finance Group.
National Australia also wrote down A$20 million in loans to Rubicon Holdings Australia Ltd., which today handed over operations to outside managers after the collapse of parent Allco Finance, the bank today in a separate statement. The bank said it doesn't expect losses from the A$170 million it loaned to three trusts managed by Rubicon.
