Charity denies buying ABC centres for A$1

THE receivers of the bankrupt Australian childcare chain that counted Temasek Holdings as one of its largest shareholders has sold off some of the centres - but not at the rock-bottom prices initially reported.

The charity Mission Australia has bought 29 ABC Learning centres but none was sold for the token sum of A$1 (S$1.11) each, as an Australian news report claimed.

The Australian newspaper, citing 'industry sources', claimed that Mission Australia paid A$1 each for several of the centres it bought from the receivers PPB.

But Mission Australia spokesman Paul Andrews told The Straits Times yesterday: 'That's not the case. That's a bit of journalistic licence in The Australian a few weeks back.'

He said the 29 centres were 'bought as a collective package' and 'none of them was purchased for a dollar each'.

However, he could not disclose the purchase price due to 'commercial confidentiality'.

PPB partner Stephen Parbery, referring to the reported sale price of A$1 per centre, told The Straits Times: 'I don't think there's any truth to that.'

Asked about the news report, a Temasek spokesman said: 'We continue to monitor the situation but are not in a position to provide further comments.'

The Straits Times understands that Temasek is not involved in the sale process being handled by the receivers.

ABC Learning was the world's biggest childcare operator before it was seized by lenders last November after it was unable to clear nearly A$1 billion in debt.

Forensic accounting specialist PPB, the court-appointed receivers, is selling the 241 ABC Learning centres that were deemed financially unviable.

Temasek paid A$401.5 million to take a 12 per cent stake in ABC Learning in May 2007, buying in when the shares were at A$7.30 each.

The stock's value plunged to 54 Australian cents last August before trading was suspended.

Other large shareholders include Lazard Asset Management and Morgan Stanley Private Equity.

ABC Learning grew rapidly, but its swift expansion was underpinned by substantial debt levels. Then questionable management and higher interest rates in the wake of the credit crunch took their toll.

PPB's Mr Parbery said 210 of the 241 centres have been sold to 65 different buyers, and added that figures would be revealed to the court only after the whole sale process was over.

'We're about to complete sales in the next few weeks...we're in the final stages of going through the settlement processes of the contracts,' he said.

'It's been a successful process, we will be in a situation to avoid closure of the far majority of the centres which the mandate provided in our court orders.'

Mission Australia, a non-profit welfare organisation, plans to use the centres to aid less well-off children to make a successful transition to school.

Mr Andrews added: 'We were able to secure favourable rent concessions and terms for some specific centres which helped balance the sustainability of the whole package.'