Paul Little’s big dilemma

Toll Holdings’ Paul Little is facing a difficult decision in regards to his shareholding in the airline Virgin Blue, according to a report in today’s Financial Review.

In something of an irony, Toll Holdings is in fierce competition with its half-brother Asciano Group for the control of Brambles, the worldwide pallet company best known for its blue CHEP pallets.

Toll needs to spin off its holdings in Virgin Blue to raise funds for the exercise, whilst not allowing control in tthe air carrier to go to one of its competitors on the freight logistics front, as Toll relies heavily on the belly space of the red aeroplanes for its national airfreight needs.

But if he were to sell off too quickly, Paul Little would forego strong and increasing revenue from the airline. If he were to wait too long, according to the FinReview, he could expose Toll to a potentially looming downturn int he aviation market.

With the battle for Brambles heating up considerably, Asciano is rumoured to be in talks with Macquarie Bank and the Singaporean investment house Temasek, while Toll is reported to be in talks with investors in the United Arab Emirates, home of Emirates the airline. With plenty of investment funds available in that region and a freight-friendly airline looking for further expansion, the sale of Virgin Blue to Emirates could provide both the funds and capacity security that Toll Holdings so desparately needs.

Watch this space.