AUSTRALIA: Toll dumps Virgin Blue down under

Australian freight giant, Toll Holdings will quit its holding in Australian airline Virgin Blue by distributing its 62.7 percent stake in the carrier to its own shareholders. The move came as little surprise as Toll had previously stated that it was not a long-term holder of Virgin Blue and would treat the carrier as a […]


Australian freight giant, Toll Holdings will quit its holding in Australian airline Virgin Blue by distributing its 62.7 percent stake in the carrier to its own shareholders.

The move came as little surprise as Toll had previously stated that it was not a long-term holder of Virgin Blue and would treat the carrier as a ‘discontinued operation’ from its June 2008 financial statements. Toll will pay an ‘in specie dividend’ by way of Virgin Blue shares.

“This separation will strengthen Toll’s balance sheet and allow it to focus on growing its core global logistics business,while retaining links to Virgin Blue through its long-term freight agreement,”said Toll managing director Paul Little.

He said the ‘in specie dividend’ was a compelling transaction for both Tolland Virgin Blue shareholders, and would enable both companies to better pursue their own development strategies.

Little said that Toll’s core logistics operations are performing in line with the company’s forecasts and major costs remain well controlled. In particular, fuel surcharging is proving effective in managing fuel price volatility.

“The group is in excellent shape to tackle any economic downturn, and to take advantage of opportunities which will no doubt arise,” said Little.”We have made a number of value enhancing acquisitions over the past few months, and will continue to actively pursue transactions as they present themselves.”