As it struggles to rebound from bankruptcy, Winn-Dixie Stores, Inc. announced yesterday that it will sell all of its 12 supermarkets in The Bahamas to BK Foods Ltd., a local Bahamian company for $50 million.
The announcement was made by the Jacksonville, Florida headquarters.
Nine of the supermarkets are under the City Markets banner and 3 under the Winn-Dixie banner. All 12 stores are expected to remain open following completion of the transaction, according to a company statement.
Winn-Dixie President and Chief Executive Officer Peter Lynch said a sale of the Bahamian operation is in the company’s best interest as it continues to sharpen its focus on successfully implementing a business plan and preparing to emerge from Chapter 11 bankruptcy.
“Although the 12 stores in the Bahamas are profitable, they are not a core business for us,” he said. “The additional liquidity generated from this sale will help Winn-Dixie support the remodeling of existing stores and development of new stores in our core U.S. markets. We are pleased that a local Bahamian company recognizes the value of the Bahamian stores and the associates working in them.”
A wholly-owned subsidiary of Winn-Dixie, W-D (Bahamas) Ltd. reached a definitive agreement to sell its majority stake in Bahamas Supermarkets Limited [BSL] to BK Foods, Ltd., it was explained.
The agreement provides an opportunity for the submission of higher or better offers through an auction to be held at a later date.
Jerome Fitzgerald, director of BK Foods, said he and his partners are pleased to have been able to successfully conclude this phase of the transaction. He credited Bahamas Supermarkets Limited with having a long history of success and profitability.
“Our group fully expects that success to continue with the same management team overseeing day-to-day operations at the company and the same associates in the stores. We believe this is a good opportunity that puts the retail food business in the Bahamas completely in the hands of Bahamians,” he said.
Mark Finlayson, another director added, “We are excited about this chapter in the retail food market and look forward to continuing the excellent tradition Winn-Dixie is leaving here in The Bahamas.”
Under the terms of the agreement, subject to the outcome of the auction, Winn Dixie, which owns approximately 78 percent of Bahamas Supermarkets common stock, will sell all of its shares of the common stock for $50 million. The other 22 percent of Bahamas Supermarkets common stock will remain publicly traded in The Bahamas.
The agreement is subject to conditions, including Winn-Dixie obtaining Bankruptcy Court authority to exercise its consent to execution of the transaction by W-D (Bahamas), which is not a debtor under Winn-Dixie’s Chapter 11 proceedings. In addition, subject to obtaining Bankruptcy Court authority, Winn-Dixie has agreed to enter into a transition services agreement that provides for an orderly transfer of management and operational know-how regarding the operation of the Bahamian business, and to enter into a Non-Compete Agreement for a period of two years.
The agreement does not include rights to use any Winn-Dixie trade name or trademark, all of which will be removed from the stores in the Bahamas within six months of closing of the transaction.
Upon completion of this transaction, Winn-Dixie will operate 538 stores in Florida, Alabama, Louisiana, Georgia, and Mississippi (including 10 that are temporarily closed as a result of Hurricane Katrina).
The Bahama Journal
