ASX Release - Toll Announcement Jul 0814/07/2008
ASX RELEASE - Virgin Blue Holdings Limited
TOLL ANNOUNCES PAYMENT OF AN IN SPECIE DIVIDEND TO TOLL SHAREHOLDERS, SATISFIED BY DISTRIBUTION OF VIRGIN BLUE SHARES
Virgin Blue is supportive of the announcement by Toll Holdings Ltd (Toll) that Toll intends to distribute 98.3% of its 62.7% stake in Virgin Blue to Toll shareholders by way of an in specie dividend.
Virgin Blue shareholders will benefit from the significantly increased liquidity in Virgin Blue shares, and in addition will have more certainty around its long-term ownership. Following Toll’s distribution, Virgin Blue should qualify for inclusion in the ASX 300.
Virgin Blue looks forward to a continuation of the strong relationship and support from the Toll Group built up over the last two years, together with the on-going freight arrangements in place between the two companies.
Chief Executive Officer, Brett Godfrey, said “we see Toll’s exit as an opportunity to introduce long term investors to the company. Despite the difficult trading environment that we are facing at the present, the longer term outlook for the Group is very strong, and we have a number of new products that will be launched in the coming months, including VAustralia.
With regard to the ongoing strategic review of the business, further initiatives will be announced in the near future concerning capacity management and new revenue initiatives.”
Co-founder of Virgin Blue, Sir Richard Branson, said, “Virgin Group has enjoyed working alongside Toll over the past 2 years. Virgin Group remains a long-term committed cornerstone shareholder in Virgin Blue and has a high degree of confidence in Virgin Blue’s business model and future.”
Toll has advised that its nominated Directors Messrs Little, Ludeke, McInerney and Mallon will resign from the Virgin Blue Board following completion of the in specie distribution. In addition, Mr Bob Watson has resigned as a Director. Current Chairman, Neil Chatfield will continue in the role until the Annual General Meeting.
The Virgin Blue Board will now form a committee to nominate additional independent Non-Executive Directors and a new VBA Holdings Ltd Chairman. The new appointments are expected to be finalised by the Annual General Meeting to be held in October.
Current directors Neil Chatfield and Paul Little have indicated that they have no present intention of disposing of the shares in Virgin Blue that they will receive upon distribution.
TRADING FOR THE YEAR ENDING 30 JUNE 2008 AND OUTLOOK
On 13 June 2008, Virgin Blue announced capacity reductions and a $50 million package of cost savings as part of the company's response to continuing record fuel prices. The company announced that these initiatives were the first outcomes of an ongoing review monitoring global jet fuel prices which now equate for 35% of the company's cost base.
The company can also confirm its guidance provided on 11 April 2008 that its underlying net profit after tax for the financial year ending 30 June 2008 is likely to be in the range of $132m-$137m, exclusive of approximately $40m of development costs associated with new initiatives being launched in 2008.
The Company’s balance sheet and cash reserves remain strong and based on current trading conditions the Board sees no requirement for additional equity raisings in the foreseeable future.
About Virgin Blue Group
Multi award winning airline Virgin Blue and international carriers Pacific Blue and Polynesian Blue currently operate a fleet of 63 modern Boeing 737 and Embraer E-Jet aircraft flying to 24 Australian and eight international destinations including New Zealand, Fiji, Samoa, Tonga, Vanuatu and the Cook Islands. Virgin Blue was the first airline in the world to launch a Government-certified carbon offset program, where Guests can offset the carbon emissions from their flights. Virgin Blue Group has also announced plans to launch Australia's newest international airline, V Australia (www.vaustralia.com), with flights between Sydney and Los Angeles set to launch on 15 December 2008, subject to regulatory approvals.