The Tribune

By NEIL HARTNELL

Tribune Business 
Editor

nhartnell@tribunemedia.net

The Government has received a “formal application” from the Barbados-based SOL Group for its approval of the Esso (Bahamas) acquisition, a Cabinet Minster yesterday confirmed, while promising to consult with the latter’s Bahamian retailers before any decision was taken.

Confirming that the necessary documentation was received from the intended purchaser late last week, Khaalis Rolle, minister of state for investments, pledged that the Christie administration would act “ in the best interests of the country”.

Tribune Business exclusively revealed Esso (Bahamas) multi-million dollar purchase by the SOL Group last month, and that the Barbadian conglomerate might “face some challenges” in obtaining the necessary government approvals as a foreign investor.

In particular, the Christie administration was unhappy that the multinational oil giant had not informed it in advance of plans to sell its Bahamian retail and wholesale operations, and that Bahamian investors appeared to have been excluded from having an opportunity to bid.

However, Mr Rolle yesterday appeared to strike a more conciliatory tone, pointing out that the deal had to follow a set approvals process and it was impossible for him to currently say “what it should look like”.

Confirming that the Government had already had initial meetings with both the SOL Group and the vendor, Exxon Mobil, Mr Rolle said: “We’ve just received a formal application, and are taking it through the normal process that we follow with similar types of application.

“We’re doing all the consultation and due diligence we would typically do with this type of application. With deals as big as this, we have to make sure due diligence is done.”

Acknowledging that there was “always concern” when foreign investors bought a Bahamian company, and assets, of this scale, Mr Rolle said the ability - or non-ability - of Bahamian investors to participate in the bidding would be among the factors considered by the Government.

“I can’t comment on any aspect of what the deal should look like at this point in time,” he told Tribune Business.

“We’re going to review it, and have consultations on it, and in the final analysis we will do what’s in the best interests of the country.

“We have to meet with the existing [gas station] retailers as there’s potential for them to be impacted by it, so we want to ensure that’s minimised.”

The SOL Group, and its SOL Petroleum subsidiary, is headed by Sir Kyffin Simpson, the businessman who holds the Suzuki franchise for the entire Caribbean region via his Simpson Motors business.

SOL stands for Simpson Oil Ltd, and its purchase of Esso (Bahamas) is part of a wide-ranging deal - said to be valued at $650 million - that will see the Barbados-based conglomerate snap up ExxonMobil operations in six other Caribbean territories. That likely values the Bahamas operations by themselves at $100 million-plus.

SOL Petroleum has extensive Caribbean-wide interests, having acquired Shell’s retail and commercial fuels business in Barbados, St Lucia, Antigua, Anguilla, Guyana, Suriname, Belize, St Kitts/Nevis, St Vincent, Grenada, British Virgin Islands, Netherlands Antilles and Dominica.

It operates 350 Shell-branded service stations in the Caribbean, plus another 60 under the Sol brand in Haiti, Anguilla, St Kitts, St Maarten and the BVI.

All told, SOL Petroleum operates 55 companies in 19 Caribbean territories, and it has long wanted to break into the Bahamas.

Tribune Business reported several years ago how SOL bid on Shell (Bahamas) when it came on the market, only to be disadvantaged by its ‘foreign’ status in a process that ultimately saw it lose out to BISX-listed FOCOL Holdings.

This newspaper was also 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.

Esso’s sale - long expected - marks the third and final global oil multinational to exit its downstream (retail and wholesale) businesses in the Bahamas and wider Caribbean.

Shell was the first, via the FOCOL Holdings deal, with Texaco following suit via the Rubis purchase.

SOL’s acquisition of Esso (Bahamas), if approved, is likely to be executed along similar lines, with the Barbados-based group either using Esso’s trademarks under licence or ultimately replacing them with its own brand. A fuel and petroleum products agreement will also be signed.

The sale will also include the 14 Esso service stations on Nassau, the wholesale operations and the marina and aviation fuels business.