<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>Temasek's Aussie investment gets $22m lifeline
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->A DEBT-RIDDEN Australian investment of Temasek Holdings has been handed a lifeline.
The Australian federal government yesterday pledged A$22 million (S$22.2 million) to ABC Learning Centres, the world's largest childcare operator, to ensure it stays open till the end of the year, Associated Press reported.
ABC was seized by lenders on Thursday after it was unable to clear nearly A$1 billion of debt. Ferrier Hodgson Group was appointed as its outside managers, while McGrathNicol was named receiver to 38 divisions of the business.
Temasek is ABC's second largest shareholder. It paid A$401.5 million in May last year for a 12 per cent stake, before increasing the stake to 14.7 per cent earlier this year. This has since been diluted to 12.68 per cent after ABC completed an A$82 million equity placement in June.
The Business Times reported yesterday that Temasek is 'monitoring the situation closely and will explore all options available'.
Former ABC chief executive Eddy Groves rapidly increased the number of centres operated by the company in just 21/2 years, at the same time putting the company under a mountain of debt. The company is said to have almost 1,100 centres in Australia and more than 1,000 in the United States.
'The $22 million represents the possible cost of supporting the continued operation of these centres for two months...and will also provide stability for employees of ABC Learning,' Australian Education Minister Julia Gillard said.
The company's share price has lost 94 per cent of its value to 54 Australian cents after peaking at A$8.80 in 2006, until it was halted from trading in August after it failed to release its earnings results.
ROBIN CHAN
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->A DEBT-RIDDEN Australian investment of Temasek Holdings has been handed a lifeline.
The Australian federal government yesterday pledged A$22 million (S$22.2 million) to ABC Learning Centres, the world's largest childcare operator, to ensure it stays open till the end of the year, Associated Press reported.
ABC was seized by lenders on Thursday after it was unable to clear nearly A$1 billion of debt. Ferrier Hodgson Group was appointed as its outside managers, while McGrathNicol was named receiver to 38 divisions of the business.
Temasek is ABC's second largest shareholder. It paid A$401.5 million in May last year for a 12 per cent stake, before increasing the stake to 14.7 per cent earlier this year. This has since been diluted to 12.68 per cent after ABC completed an A$82 million equity placement in June.
The Business Times reported yesterday that Temasek is 'monitoring the situation closely and will explore all options available'.
Former ABC chief executive Eddy Groves rapidly increased the number of centres operated by the company in just 21/2 years, at the same time putting the company under a mountain of debt. The company is said to have almost 1,100 centres in Australia and more than 1,000 in the United States.
'The $22 million represents the possible cost of supporting the continued operation of these centres for two months...and will also provide stability for employees of ABC Learning,' Australian Education Minister Julia Gillard said.
The company's share price has lost 94 per cent of its value to 54 Australian cents after peaking at A$8.80 in 2006, until it was halted from trading in August after it failed to release its earnings results.
ROBIN CHAN
