BK Foods’ principals ﾖ Mark Finlayson, Jerome Fitzgerald and Philip Kemp ﾖ were hardly out of their twenties when Sir Lynden Oscar Pindling, then Prime Minister of The Bahamas and a nationalist at heart, initiated the reserved for Bahamians only policy.
Pindling wrestled for years with the fact that ordinary Bahamians, black and white, were still struggling to become self-sufficient and were still struggling to achieve economic and financial independence.
Sure, there were entrepreneurs like Audley Kemp, Tiger Finlayson, Rupert Roberts, Nettica Symonette, Billy Lowe and Albert Miller, but not enough to say that ordinary Bahamians had “arrived”. It was against this background that the Pindling Government introduced the policy of reserving some commercial areas for Bahamians only.
It was a simple policy, designed to do a simple thing ﾖ give ordinary Bahamians a leg up. The Government studied the economy and decided that there were industries and businesses for which Bahamians did not need outside assistance. Bahamians had developed great strengths as importers and distributors ﾗ the Pritchards, d’Albenases, Roberts, Lightbourns and Solomons had done it for many years ﾖ and very profitably. The Butlers, Darvilles and Roberts were also showing promise as retailers. Protecting these areas was an easy way to expand Bahamian ownership and empowerment. The Government decided it would not give foreigners any new licences to engage in these types of businesses. It has worked well for Bahamians.
When the story broke that BK’s group of young, entrepreneurs were pursuing City Markets, many were happy to hear that those Bahamian assets were finally coming back into Bahamian hands. It instilled a sense of national pride.
That same sense of national pride is what gives credence to this pro- Bahamian policy. It is designed to encourage Bahamians of every hue, educational background, status or calling who have the skill, desire and determination to start a business in one of these protected industries.
The policy of “reserving some for Bahamians” and the Bahamianisation policy regarding jobs were established seperately, but they may be considered “companion” policies though implemented years apart. Both were designed to prepare Bahamians for ownership.
Somewhere in The United States the people of Winn Dixie, are testing the reserved for Bahamians policy.
BK Foods is an all-Bahamian company whose principals’ navel strings are buried deep in Bahamian soil. These are the “next generation” of Bahamian entrepreneurs. Most of their parents are hard-working people who were born poor but pulled themselves up from despair, and weathered the storm to finally find success. Their sons are determined to make a difference in their own generation ﾖ at home, in their own country. They represent a new breed of Bahamian business people, just like Michael Symonette from Bahamas Experience Tours, Anthony McKinney from Paradise Fisheries, Anthony Ferguson from Colina Financial Advisors, Jack Ritchie, from Global United and Elaine Williams-Pinder from Bamboo Shack chain ﾖ all making a difference. All successful at what they do.
The BK people are up against BSL ﾗ a group comprising Anwer Sunderji, head of Fidelity Group of Companies; Craig Symonette, brother of Brent Symonette and the son of the first premier of The Bahamas; Frank Crothers of Caterpillar fame and owner of the electricity company in Providenciales, Turks & Caicos; and Frank Butler, son of The Bahamas’ first Governor-General and president of Milo Butler & Sons.
They were successful at the auction held last month in New York, but not without having difficulties in closing the deal.
At least two in the group are non-Bahamians. Under ordinary circumstances this would exclude them from ownership in the retail/wholesale business in The Bahamas. This is only part of the problem.
Until recently, sources tell us that this group had the backing of Neal & Massy, a major player in the Trinidad & Tobago economy. Neal & Massy runs Hi-Lo, the largest chain of food stores in Trinidad, and has a major stake in Barbados Shipping which runs Super Centres, the largest chain of food stores in Barbados. Sources tell us that once the group was finally convinced that local regulators would not consider their application, Sunderji and party were forced to go back and re-think, re-group and fix the situation. Neal & Massy had been invited to participate at the behest of Craig Symonette, chairman of Abaco Markets, owners of Solomon Wholesale Club and Costrite, another mega food operation in Nassau and Freeport.
If things had gone according to plan, Neal & Massy/ Barbados Shipping would have ended up being the largest individual shareholder, and controlling partner of the largest chain of food stores in The Bahamas. There was another significant added benefit: they would have an absolute monopoly in Freeport. The three Winn Dixie Stores, Solomon’s Wholesale Club, plus Costrite would control all the major foodstores in the nation’s second city.
Freeport has the second largest concentration of residents in The Bahamas, and Eight Mile Rock is the largest and most densely populated area in the country. With the buying power of the Neal & Massy/ Barbados Shipping, its marketing strength and financial resources, any competition would die in Freeport.
The combination of people in BSL is also interesting. Sunderji controls a retail and merchant bank. The Symonettes are major players in the shipping business, and when combined with the Butlers, they already control over 20 per cent of the Bahamian food industry with Solomon’s Wholesale, Costrite and Milo Butler & Sons. Combined with City Markets, they would control approximately 50 per cent of the retail food business. With Crothers, they control Commonwealth Bank. With Neal & Massy’s interest in Financal Services, Shipping, and Food in Trinidad and Barbados, one wonders where the BSL Holdings deal is headed.
The biggest prize of all ﾖ Neal & Massy would have edged itself, northward into the most successful economy in the Caribbean. A sort of commercial CSME without the hassles of signing on to any cumbersome treaties. They would also be just 60 miles off the coast of Florida.
According to BSL Holdings, Neal & Massy and Barbados Shipping are out of the deal. How were they to raise the $54 million they bid, having lost 40 per cent of their strength? Abaco Markets is hardly in a position to come to the rescue, given its over leveraged balance sheet, and dismal earnings. In the last few years, the share price dived from over $6.00 per share to $0.59 in April of 2006. Remarkably, there has been a major up-surge in the value of the company’s stock.
It closed at $1.71 at the writing of this article leaving one to ponder just who is buying all of those shares.
There was some speculation about the source of BK funding. Tennyson Wells and Pierre Dupuch warned in the House of Assembly about BK using pension funds for investing in City Markets, but interestingly, there has been an eerie silence on BSL Holdings pursuit of pension fund money.
Since Fidelity’s Anwer Sunderji has been the most outspoken of the BSL Holdings partnership, could Fidelity be the source of their funding? The recently released financials from Fidelity would suggest otherwise. Can Fidelity pull it off without Neal and Massy or Barbados Shipping? In any case, isn’t Fidelity itself a non-resident company that would require Central Bank approval if they had the ability to complete the deal themselves.
BSL Holdings seemed to be convinced that they had the deal locked up. And the current management at City Markets thought so too.
By the third week in May they were touring their branches and briefing staff on the changes. Did they move too fast? Before BSL jumped into the fray and changed the complexion of the sale process, BK thought they were home free. Sources say that they had all the funding and had met all US and certainly all local government and its agencies requirements, but they, too, came up short.
City Markets had gross sales of $132 million in fiscal 2005, with net income in the vicinity of $7 million.
They have $13 million in the bank at last reports. Will this successful Bahamian enterprise end up in the hands of a foreign concern once again? Is this the end of economic sectors reserved for Bahamians? If so, will companies like Neal and Massy and Barbados Shipping be able to extend there sphere of influence over the few shipping companies, and banks that are currently owned by Bahamians?
The Nassau Guardian
