ABC drags down NSW childcare provider

The operator of 43 childcare centres in NSW, CFK Childcare Centres Ltd, has gone into voluntary administration due to a failed asset sell-off to ABC Learning Centres Ltd. The CFK board appointed BDO Kendalls as voluntary administrators on Tuesday and revealed the company was currently losing more than $400,000 each month.


CFK said it had been unable to complete an $8.5 million sale of childcare centres to
the financially troubled ABC Learning.
The failure of the deal meant CFK had not met one of the preconditions to any
standstill arrangement with its banker National Australia Bank (NAB), and therefore
could not complete its 2008 financial report.
ABC Learning, Australia's biggest childcare provider, went into voluntary
administration and receivership earlier this month with debts of more than $1
billion.
"The uncertainty bought to the childcare market after months of speculation about
the financial health of the largest operator ABC, followed by the appointment of
administrators to that company has materially impacted CFK's ability to sell other
centres and has caused a devaluation of CFK's assets," the company said in a
statement.
The global economic downturn has also hindered CFK's ability to seek finance from
investors to fund its operations, it said.
The CFK board said it would work with the administrator with a view to keeping open
as many centres as possible.
It is hoped expressions of interest in some if its centres will result in some being
bought by third parties.
Parents are advised to contact their local centre for further information.