EXCERPTS
Australia's federal government on Wednesday pledged tens of millions of dollars to keep 241 childcare centers open until March as the nation's largest childcare group struggles to continue operations amid deep debt.
The 34 million Australian dollars ($22.4 million) will keep ABC Learning's unprofitable centers open while the financial administrators try to lead the company to recovery.
The government had already given AU$22 million to ensure that the more than 1,000 ABC centers across Australia would remain open until the end of the year after the company went into receivership in November.
ABC Learning Ltd. is Australia's largest private childcare agency. It also has more than 100 childcare centers in New Zealand and more than 1,000 in the U.S., where it is the second-largest childcare operator.
The government's announcement came immediately after the receivers, McGrathNicol, said 55 centers would close at the end of the month, resulting in 4,000 children and 400 staff relocated to a center within 1.55 miles (2.5 kilometers) of their present one.
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Honey said 100 people will lose their jobs in the closings.
Honey said 720 ABC centers will remain open and the Defense Department, whose staff rely heavily on ABC, would fund another 21 branches. He labeled 241 centers "unviable," and it is those that the government stepped in to temporarily save.
Deputy Prime Minister Julia Gillard said she believed that some of those centers could be viable under a different business model. She said the government asked McGrathNicol to place the unviable centers under a different receiver to pursue other arrangements to try to salvage them.
ABC Learning Centres Ltd. went into receivership in early November after being unable to clear nearly 1 billion Australian dollars ($646 million) of debt. The receivers, McGrathNicol, are tasked by creditors with recouping loans.
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- reprinted from the Associated Press