The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

FOCOL Holdings yesterday said it decided not to bid for Esso (Bahamas) because the deal’s multi-territory structure was “not consistent with our business model”.

Franklyn Wilson, the BISX-listed petroleum products supplier’s largest shareholder, told Tribune Business that ExxonMobil’s decision to package seven countries - including the Bahamas - into one sale would have extended FOCOL too widely throughout the Caribbean.

“We never put in a bid,” Mr Wilson said. “We accepted that the way the thing was structured, it was not consistent with our business model. It would have required us to get involved in a dozen other countries.”

He added that the bidders for Esso (Bahamas) wholesale and retail business “certainly extended past four. We are certainly aware of four that indicated interest, or participated in the process”.

Tribune Business exclusively revealed on Thursday that ExxonMobil has signed a deal to sell its Esso (Bahamas) business to the Barbados-based SOL Group, headed by businessman Sir Kyffin Simpson.

Mr Wilson declined to comment when Tribune Business asked whether he was disappointed that the sale process structure favoured multinational or regional groups, and effectively prevented Bahamians from bidding, saying this was “a public policy” issue.

If the SOL Group purchase goes through, all three Bahamas-based fuel/petroleum companies will have changed hands within a seven-year period.

FOCOL Holdings acquired the Shell (Bahamas) operations in 2006, while French multinational Rubis purchased its Texaco rival in 2011.

With the SOL Group poised to enter the market, subject to the necessary approvals from the Christie administration, the one Bahamian operator, FOCOL, will still find itself competing against multinationals despite the global oil giants’ exits.

Asked about the potential for increased competition from a SOL-owned Esso, Mr Wilson told Tribune Business that FOCOL would “not lay down and die”.

“We’ve just got to do the best we can to defend our turf,” he said. “We’ve been around for a long time, have a number of strengths, enjoy the confidence of the Bahamian public, and we will do all we need to do to justify and sustain that.”

Pointing out that the Bahamas had three major oil companies prior to their former owners’ exits (one now pending), Mr Wilson said this would still be the case when the SOL Group purchase went through.

“It’s just changing who’s at the wheel, but we don’t see any fundamental changes,” he told Tribune Business.

“We will do what we need to do. We will deal with reality the way it is, and seek to do what we have to do. We’re not going to lay down and die. We will respond to whatever comes.”

Mr Wilson’s comments came as Tribune Business was informed that several Bahamian groups were being formed to either offer an alternative buyer to the SOL Group or potentially partner with it in the deal.

These moves are either designed to ‘pick up the pieces’ or gain a ‘piece of the action’, especially in light of the likely difficulties the SOL Group may encounter in obtaining Government approval for the Esso purchase.

Several sources told Tribune Business that former Esso (Bahamas) country manager, Keith Glinton, was working to put together either a Bahamian or foreign group, and potentially even partner with the SOL Group. And this newspaper knows of at least one other Bahamian investor group that is being formed to partner with the Barbadian conglomerate.

Their emergence has come after Tribune Business reported the Christie administration was less than pleased that ExxonMobil and its Bahamian subsidiary gave no advance warning of the sale.

Partnering with a Bahamian investor group, or allowing some kind of equity participation, would likely smooth the approval passage for the SOL Group, given that in recent years both governments - FNM and PLP - have insisted on local ownership components in return for permitting the foreign acquisition of Bahamas-based assets/

Indeed, in the Commonwealth Brewery and Bahamas Food Services deals, the Government mandated that a percentage of the companies equity (25 per cent and 15 per cent, respectively), be made available to Bahamians via initial public offerings (IPO).

The Government could insist on such terms over the Esso (Bahamas) deal, or potentially refuse to approve the SOL Group purchase, opening the door to Bahamian bidders. The latter move, though, would be potentially risky.

Tribune Business was also told that when ExxonMobil’s intentions to exit the Bahamas became known, efforts were made to encourage it to sell the assets locally - a plea that fell on deaf ears.

“There was a local movement internally to bring it to the dealers or a local group, but they [Exxon] wouldn’t consider us,” one source said.

Meanwhile, Esso’s gas station dealers told Tribune Business they were essentially ‘in the dark’ on the SOL Group purchase, knowing little more than the buyer’s name and the fact a deal has been agreed for the company’s sale.

Arnold Heastie, head of Heastie’s Service Station on Blue Hill Road and Coconut Grove, said: “We know very little about it right now. I need to go and ask them about the internal details.

“All we know is that the sale has happened. We’ve been told there won’t be much impact, if any, and that they will honour the contract, but you never know until you know. People change, things change.”

And he added: “We’re all trying to get clarification on certain items. Other than the meeting where we were told of the sale, we don’t know anything.

“Each of us dealers, I’m sure, has a concern, and I’m sure we must all be having private talks, but I’ve not got to mine. I haven’t pushed it yet.”

Clyde Rashad, the Esso dealer at the Village/Soldier Road roundabout, expressed similar sentiments to Mr Heastie, saying he was adopting a ‘wait and see’ attitude.

Confirming that all dealers were called to a meeting informing them of the sale three weeks ago, Mr Rashad added: “We’re operating under ExxonMobil, which is a pretty strict and difficult company to operate under. It can’t get any worse, I suppose.

“Hopefully, we’ll still be here at the end of the day. Based on the precedent when they’ve gone into other countries, that should happen, and it will behoove them [SOL] not to ruffle any feathers.

“The model that exists from ExxonMobil is a pretty good one, and hopefully there will be more leniency in some areas.”

Greg Burrows, the PLP Senator and another Esso dealer, said his political position meant he could not comment on the deal.