April 05, 2012
The owners of Trans Island Traders (TIT) are not the only ones that are losing out on City Market's demise. More than 1,400 minority shareholders won't be seeing any return on their investment now or in the future, according to the supermarket chief.
Mark Finlayson, president of Bahamas Supermarkets Limited (BSL), confirmed to Guardian Business that when his family acquired the supermarket chain in late 2010, it was already essentially bankrupt.
"We bought a company that was bankrupt. We have tried our best to turn it around and keep it solvent. This has been a problem long before my family took ownership of the City Market food store chain," according to Finlayson.
Despite efforts to turn the supermarket chain around, the damage was too great, he said.
He noted that this is the reality BSL is faced with, and at this point, the more than 1,400 minority shareholders will also lose out.
At this point, BSL's chief noted that none of those shareholders would receive a return on their investment, unless they were to inject more money into the struggling food store chain.
"If 78 percent of the company is only worth $1, then each one of the shares after that would be worth a penny because there is no lower denomination than that. If you put another $1 into the company, it would really take you over 90 percent and you buy everyone out for a penny," he said.
"We decided not to do that because we believed that we could have turned the company around, but we put a lot of money inside the company and put it in the form of debt, specifically not to wipe out the other shareholders. We had to put some equity at the end of the year in order to ensure that the company was solvent."
Finlayson shared with Guardian Business that the minority shareholders have never been asked to invest more money into the company by himself or the previous owners.
He continued: "If you are a shareholder, then more money would have had to be invested. The only way that you would keep your percentage is if you match pro rata what is being put in."
"This company is in debt, so whatever action that is being taken is at the discretion by the company that it is in debt to. Everybody wants me to spend $100,000 to host an annual general meeting, but where is it coming from? This is the reality that we are dealing with."
Finlayson revealed the City Market brand has been faced with challenges for a number of years, some that existed long before his family bought the business.
"As far as we are concerned, the investment that we have put inside there, we are going to recover from them. Close to $20 million has been invested into the City Market food store chain. I am looking to get every penny of that back," he noted.
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