Following the announcement that BSL Holdings had won the bid for 3.9 million shares of Bahamas Supermarkets Limited which operates the 12-store City Markets chain, reports of “conflict of interest” and regulatory transgressions have been swirling about town regarding the minority shareholders – Abaco Market Limited’s (AML) Craig Symonette AML’s newly appointed CEO) and Franklyn Butler – in BSL Holdings.
Those minority shareholders have issued a statement addressing those concerns but more importantly for Abaco Markets shareholders is the announcement that the company which began in Abaco has sold its Abaco operations to concentrate on its “core market strategy for growth”.
In an interview on the eve of announcing his successor AML’s former president David Thurlow admitted that management at their Abaco operations had been unable to implement strategy and regain the market position that had been lost due to the challenges the group had faced and which had been exacerbated in part by a fire which had damaged operations in Abaco.
At the time Mr Thurlow had indicated that the Abaco operations had been a significant contributor to the company’s red ink. He had given no indication at the time that management and the board were contemplating selling off Solomon’s Abaco.
In the press release acknowledging that the “decision to sell Solomon’s Abaco was a difficult but important step”, the company clearly remains concerned about reducing the size of its debt which at the time of the interview was approximately $18 million 50 percent below what it was when Mr Thurlow announced his turnaround plan to the media over two years ago.
Mr Symonette stated that the company would continue its focus on returning to “profitability and an increase in our shareholder value”. Clearly the Abaco operations with a declining return on investment had become a burden and a hindrance to increasing “shareholder value” which has taken a pretty severe beating, but is now showing signs of recovery. The share closed unchanged in Wednesday’s trading at $0.87
According to Mr Symonette this strategy allows the company to “redeploy capital for further debt reduction and for growth opportunities in New Providence and Grand Bahama ” which he stated were “our core markets”.
Which brings us to the company’s position in BSL Holdings. Putting to rest reports of “conflicts of interest” and regulatory missteps, Mr Symonette stated that AML’s minority position in BSL Holding is part of AML’s pursuit of “strategic opportunities to increase shareholder value over the long term”.
“The prospect of a minority investment in BSL Holdings may present new opportunities for our Company in the form of synergies,” he explained.
Addressing specific concerns about a public announcement of AML’s minority and “passive” position in BSL Holdings, Mr Symonette stated that “no disclosure could come before a US Bankruptcy Court approved the sale to BSL Holdings”.
With regard to meeting Bahamian regulatory requirements, the statement noted that “Abaco Markets confirmed that the “appropriate disclosures had been made to both BISX and the Securities Exchange” on Monday following last week’s announcement that US bankruptcy court had approved the sale of Winn-Dixie’s 3.9 million shares in Bahamas Supermarkets Limited to BSL Holdings Limited.
Mr Symonette re-affirmed his commitment to AML stating that “We are steadfast in our commitment to Abaco Markets, focusing on our day-to-day operations and pursuing strategic interests to support our return to productivity and profitability.”
By: C. E. HUGGINS, Business Editor, The Nassau Guardian
