City Market sale finalized
Bahamas Supermarkets Ltd (BSL), operators of the City Market food stores, late Wednesday finalized the sale of 78 percent of its shares to the 100 percent Bahamian-owned Trans Island Traders Ltd. group.
Trans Island is headed by businessman Mark Finlayson, who employees have labeled”the comeback kid.”
The company is now awaiting Central Bank approval of the deal. Well placed sources estimate that approval could be given within days.
After all, said an insider familiar with the deal, every day the troubled 11-store grocery chain continues on its current financial trajectory, the more unstable the company becomes.
Already, estimates are that anywhere from$15 million to$20 million will need to be pumped into the City Market to get it back to pre-2007 levels.
“This sale means the company will get a much needed capital injection,”theGuardian Businesssource said.”This brings a degree of stabilization to shareholders and staff.”
Trans Island has no ties to the former front runner for the purchase, Associated Grocers of The Bahamas Limited(AGBL). AGBL is an affiliate of Bahamas Food Services(BFS).
AGBL’s deal with BSL collapsed over the last few weeks, as retailers voiced concerns regarding a wholesaler entering the market.
At this point, sources said it is too early to determine how employees would be affected by the sale. However,Guardian Businessunderstands that Finlayson will soon step in to take control of the company.
Current City Market CEO Derek Winford is expected to stay on for several more months, said the insider, before departing.
Company confirmation of the sale is expected within days.
Guardian Businessunderstands that some employees at City Market’s head office were informed about the sale, calling Finlayson”the comeback kid.”
News of the sale comes as City Market yesterday moved to cut work hours of some of its employees, again raising questions about its financial state.
In a letter obtained byGuardian Businessyesterday, full-time and part-time workers were notified that reduced work hours would result for some employees.
“Effective Thursday October 14, 2010 all part-time workers are to be scheduled 16 working hours, and 32 working hours for all full-time workers,”said an email sent to various store managers by the company’s security and loss prevention manager.”If additional information is required, please call your district manager.”
The notice has upset many employees, said a source close to the situation.
Officials at the Commercial Stores Supermarket and Warehouse Workers Union(CSSWWU)yesterday confirmed that rounds were made to address employee concerns.
Union President Elgin Douglas said the reduced hours would only apply to some employees. He said many full-time employees were already on 32-hour weeks. The reduction was temporarily necessary, Douglas added, as the company attempts to make operational adjustments.
“It’s just for two weeks until the shipment comes in the store again,”he toldGuardian Business.”That is the call I got from management and that’s the news I’m conveying.”
It’s unclear when the new owners will address employees who have had to work in an unstable environment for more than a year.
City Markets reported a$13.4 million loss in 2008 and a$6.069 million loss in 2009 and around$27 million in losses over the past four years.
BSL Holdings is controlled by Trinidad’s Neal and Massy. That company holds a 40 percent stake in BSL Holdings, which works out to be a 32 percent stake in BSL.