Toll Holdings makes a public exit

The Japanese group owns 717.4 million ordinary shares in Toll, worth $1.4 billion, according to ASIC filings.

Public companies need to have at least two out of three directors living in Australia, as well as a secretary. But a proprietary company only needs to have one director living in Australia.

Toll has seven directors, including chairman John Mullen who is retiring at the end of the month; Singapore-based managing director Thomas Knudsen, who will become chairman; train KPMG Australia boss Geoff Wilson; and four Japanese executives.

Toll’s shift to a private company comes after Japan Post offloaded what it described as “the perpetually loss-making” Global Express division to private equity group Allegro Funds last year.

Toll took a post-tax loss of $942.1 million on Global Express in fiscal 2021, more than double the $359.1 million loss a year earlier. New Global Express boss Christine Holgate claims to be turning around the business.

Japan Post is now orienting Toll’s remaining logistics operations towards Asia. In its 2021 annual report, the Japanese company described one of Toll’s challenges as “overcoming Australia-dependent management structure”.

Like Mr Knudsen, Toll’s incoming managing director Alan Beacham will also run the business from Singapore.

Toll has not yet filed its financial report for the year ending March 31, 2022, although Japan Post disclosed in May that the company generated $346 million in earnings before interest and tax for the full year.

Toll’s annual report for the 2021 financial year showed that it had a net asset deficiency position of $2.1 billion, including $1.5 billion at Toll Finance, a legal entity that holds bank loans.

Toll’s loans have been guaranteed by Japan Post, but the guarantee expires on June 30.

Toll’s total net financial liabilities were $4.9 billion as of March 2021, including $3.5 billion of bank loans and overdrafts. Its financial report shows $3.6 billion owed to a “Japan Post related entity”.

Toll has not disclosed the costs of two cyber ransomware attacks in January 2020 and May 2020, which forced it to shut down all of its IT systems and hire cybersecurity experts.

The company, which holds a cyber insurance policy, said last year that claims with insurers were ongoing and that “the recoverable amount is not certain”.

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