Richard Branson back in charge at Virgin Blue

Flamboyant entrepreneur Sir Richard Branson has resumed his place as the major shareholder of airline Virgin Blue after logistics company Toll decided to distribute its 63% among Toll investors.

Flamboyant entrepreneur Sir Richard Branson has resumed his place as the major shareholder of airline Virgin Blue after logistics company Toll decided to distribute its 63% among Toll investors.

Toll has been trying to sell its stake in Virgin Blue for some months, but with fuel costs surging, consumer sentiment falling and competition in the domestic airline market intensifying, the freight giant has struggled to find any interested buyers. Toll shareholders will receive one Virgin Blue share for every Toll share they own.

The deal leaves Branson, who owns 25.5% of the airline, as the largest shareholder. While Toll’s exit means the company is vulnerable to a takeover, Branson says he does not want to sell the stake and is keen for a couple of years of stability to help the company get through the adverse conditions facing the global airline industry.

“I think this is the time to batten down the hatches and not be spending time trying to sell the company,” Branson told The Australian Financial Review. He says Virgin Group would rely on the experience gained from steering Virgin Atlantic through the difficult post-11 September period to help bring Virgin Blue through its current troubles.

Virgin Group controls Virgin Atlantic and also has a stake in Malaysian low-cost airline Air Asia X, both of which are also battling high fuel prices. Branson has ruled out any kind of tie-up between Air Asia X and Virgin Blue.

Toll will be forced to take a $1.3 billion writedown in its 2008-09 accounts – this represents the difference between the value of the Virgin Blue’s stake on Toll’s books and the current value of the stake based on Virgin’s sinking share price.

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