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SYDNEY - Transport group Toll Holdings Ltd, which owns Toll New Zealand, will separate its transport infrastructure assets from its network and supply chain business under a restructure announced today.
Toll managing director Paul Little said the restructure would give the company access to key intermodal infrastructure without
the need to own it, and would allow Toll to pursue rapid growth in its network and supply chain businesses in Australia and abroad.
"It is a slight shift in strategy for the Australian businesses, but one which will enable us to pursue rapid growth in our network and supply chain businesses in Australia and overseas," Mr Little said.
Under the restructure, Toll will create two ASX-listed companies, Toll Holdings and Infrastructure Co, aimed at maximising shareholder value and positioning both companies for enhanced future growth.
Each company will be operated separately with independent boards and management teams, with Mr Little staying in the top job at Toll Holdings, while current Toll executive director Mark Rowsthorn will step into the role of chief executive of Infrastructure Co.
Toll also said current trading across the company was very strong and ahead of plant to date with full year earnings expected to exceed expectations.
It said Virgin Blue in particular had experienced strong trading to date, with its earnings expected to rise by 40 per cent for the year.
Toll said operations throughout the Australian logistics business are generating sound organic growth rates, while port container volumes had maintained a strong pattern of growth.
It said New Zealand revenues were down on this time last year, as expected, while Toll Asia operations were currently ahead of plan and customer initiatives were well advanced.
Pacific National was continuing to improve its performance, Toll said.
Mr Little said the restructure represented a unique opportunity to allocate the assets and resources of the company to shareholders', employees' and customers' maximum advantage.
The change would give investors a clear choice of investment, designed to maximise growth potential with an overall lower cost of capital and better flexibility, he said.
"The restructure should be seen as the next generation of growth for both companies by allowing each business to expand faster into global markets, through strategic acquisitions and rapid organic growth," he said.
Toll said it had briefed the competition watchdog, the Australian Competition and Consumer Commission, on the proposed overhaul, and the company was seeking a waiver of the requirement to sell its 50 per cent stake in Pacific National.
"Toll has sought a waiver of its obligations to make available the Starters Kit of rail assets, to divest the Toll vehicle transport business and its interest in the PrixCar business concerning pre-delivery vehicle inspection services and to implement the rail and port non-discriminatory regimes," the company said.
Toll said the ACCC had advised it will need to carry out market enquiries in relation to the issues, and it would look favourably on the waiver if those enquiries do not raise issues of concern.
The proposal will be put to shareholders for approval via schemes of arrangement in the first half of 2007.
Under the plan, shareholders would keep their existing stake in Toll and receive a stapled security made up of one new share and one new unit in Infrastructure Co, for each share they own in Toll.
Newly-appointed Infrastructure Co boss Mr Rowsthorn said shareholders in the new company would retain 100 per cent of Pacific National and be freed from the regulatory constraints currently in place, as a result of Toll's acquisition of Patrick Corp last year.
Infrastructure will control Pacific National and Patrick Ports and focus on investment opportunities in assets such as ports, rail, airports, toll roads in Australia and internationally.
Toll Holdings will be made up of the current Australian, New Zealand and Asian logistics business and the logistics businesses acquired through the Patrick takeover as well as Toll's 62.3 per cent stake in airline Virgin Blue.
- AAP
