The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

INVESTMENT analysts are intrigued by the now-defunct Bahamas Supermarkets’ decision to hold a shareholder meeting today, with most anticipating it is intended to complete the company’s formal winding-up and dissolution.

A small advertisement, published in Friday’s Tribune Business section, informed shareholders of City Markets’ operating parent that there will be a meeting held at 4pm today at the former Burns House property on John F. Kennedy Drive.

That property is owned by an affiliate of Trans-Island Traders, the 78 per cent shareholder of Bahamas Supermarkets. Both companies, and the JFK Drive property, are ultimately owned by the Finlayson family.

The small size of the advertisement, and the late notice provided to the 22 per cent minority shareholders in City Markets (the advert was only published on Friday, three days before the meeting), create the suspicion that the intention is for as few investors as possible to show up.

And, for those that do, getting in at the door might be a serious problem. All investors must bring proof of their Bahamas Supermarkets shareholding, either the share certificate itself or some other confirmation, plus a photo ID. Proxies acting for corporate shareholders need to bring written approval in writing.

One City Markets minority shareholder, who like most has written-off 100 per cent of his investment in the company, told Tribune Business that many shareholders - especially retail ones - might find it difficult to lay their hands on their share certificates.

They also questioned whether Bahamas Supermarkets was in compliance with the Securities Industry Act and its regulations, noting that publicly traded companies had to give shareholders a certain period of notice before holding meetings such as an Annual General Meeting (AGM) or Extraordinary General Meeting (EGM).

The advertisement did not identify the type of meeting it was, and Mark Finlayson, Trans-Island Traders’ principal, did not return Tribune Business calls seeking comment.

Nor could it be ascertained what the Securities Commission’s position on the issue was. Dave Smith, its executive director, was said to be out of office, while Mechelle Martinborough, its in-house legal counsel, did not return this newspaper’s call.

Investment analysts reacted with a mixture of curiosity and surprise to the meeting’s announcement.

“It’s very interesting. I didn’t know anything about it. It’s kind of a formality, I guess,” said Richard Coulson.

“They didn’t give much notice. I guess they don’t expect many people to be there.”

Another analyst, requesting anonymity, said: “I’m really curious to find out what’s going on. I find it very strange.”

Most predicted that the meeting was a mere formality, designed to ratify Bahamas Supermarkets’ formal winding-up and dissolution. Given that Trans-Island holds the majority 78 per cent stake, the outcome seems assured.

It is unlikely, though, that City Markets shareholders will see any of the $3.5 million paid by Super Value for the leasehold interests in the three store sites that it acquired from Mr Finlayson.

Given that Trans-Island secured its investment in City Markets via debentures, establishing it as the priority creditors, the Finlayson family will likely be paid off first, with other creditors standing behind them in the queue.

City Markets’ demise has its roots in the ill-fated $54 million deal that saw Trans-Island Traders’ immediate predecessors, BSL Holdings, acquire the Bahamian supermarket chain from Winn-Dixie.

The transition from the US chain was botched, and City Markets slipped into consistent, multi-million dollar annual losses from which it never recovered.

Trans-Island’s purchase of the business, in late 2010, came too late to save it.