The Tribune

By NEIL HARTNELL

Tribune Business Editor

BAHAMIAN wholesaler Lightbourn Trading is the party in negotiations to acquire the former City Markets head office and warehouse complex from the supermarket chain's staff pension fund, Tribune Business can reveal, with the Finlayson family hoping to exit majority ownership of the latter "by the end of this week".

Mark Finlayson, head of Trans-Island Traders, the Finlayson family-owned vehicle that holds a 78 per cent stake in City Markets' operating parent, Bahamas Supermarkets, declined to comment when asked by Tribune Business to confirm whether the pension fund, in the form of its trustees (himself) and its oversight committee, were talking to Lightbourn Trading.

However, multiple retail and wholesale industry sources confirmed the identity of the wholesaler/manufacturers' representative as the party the pension fund was talking to.

John and Jimmy Lightbourn, Lightbourn Trading's principals, have not returned Tribune Business's calls despite this newspaper leaving messages over several days last week.

However, industry sources suggested that Lightbourn Trading had been looking for some time to own its own premises, and had at one stage assessed the feasibility of constructing its own purpose-built complex in the JFK Drive and Gladstone Road area.

The former City Markets head office, though, would prove attractive, especially given its warehouse - something vital for all wholesale operators. Acquiring it would mean that Lightbourn Trading does not have to build its own property from scratch, and manage a construction project.

"That would make sense, because they currently rent the location where they are now from the Albury family," one wholesale industry source said of Lightbourn Trading's interest in the City Markets building.

"It would make sense for them to buy their own premises. They have been talking for years about building their own place and warehouse."

A retail source added: "That would be natural for them. They've been talking about doing that for a while."

While declining to identify the proposed buyer, Mr Finlayson, one of the City Markets staff pension fund's trustees, confirmed to Tribune Business that negotiations had been going on for some time.

"We've been talking for a few months. He made a proposal that was forwarded to the committee," Mr Finlayson told Tribune Business. "Everyone's trying to get the best price they can possibly get."

While he would not go into specifics over the sale negotiations, Tribune Business understands that Lightbourn Trading and the pension fund's oversight committee are still trying to agree a sales price, and that a gape remains between the two sides.

Meanwhile, Mr Finlayson also disclosed that negotiations with AML Foods "fell apart" because the BISX-listed food group did not want to hire any of City Markets' remaining 200-300 employees if they took over the latter's five remaining store locations.

And he disagreed with comments by Robert Farquharson, general secretary of the National Congress of Trade Unions (NCTU), who had alleged that comments by Mr Finlayson regarding the severance packages for City Markets staff were "inconsistent" with both the Employment Act and the industrial agreement with the union representing the line staff.

On the AML Foods' saga, Mr Finlayson confirmed to Tribune Business that one proposal he made during talks with the BISX-listed food group was for City Markets to effectively act as a 'temporary employment agency', where the latter's workers would be hired to AML when it needed them.

Some observers suggested have suggested this was a strategy to encourage City Markets' remaining staff to voluntarily leave the company, thus relieving it of any obligation to pay severance pay, but Mr Finlayson rejected this, arguing that it was an attempt to save jobs in reaching a deal with AML Foods.

"That was one of the proposals I put to AML when I was talking to them," Mr Finlayson confirmed of the 'temp agency' idea. "They refused to take on any of the employees. That's why the deal fell apart with them.

"They came back after I'd started talking to Mr [Rupert] Roberts. The reason it fell apart [with AML] was because they did not to keep any employees. I had talked to them about that idea in the sense of pleasing both parties - people would keep their jobs, neither side would take any liabilities - but they were not interested in that, and did not want to have anything to do with the existing employees. That's why the deal broke down. Some of the workers had been there for 20-30 years, and I just couldn't do it."

Mr Finlayson said Super Value would hire the majority of City Markets employees to man the four New Providence locations it was inheriting, and disclosed that Mr Roberts was looking at 'reserving' some of the purchase price to cover any potential staff severance liabilities should they arise.

As for the union concerns, Mr Finlayson said it was incorrect to assert that City Markets' staff had been "effectively terminated". Instead, he said the company's operations had been "suspended", the idea being that Super Value and Mr Roberts would take over the stores and continue.

"It's in line with the law, no matter what the union says," Mr Finlayson told Tribune Business. "I was very surprised to hear one of the trade union executives saying that. I met with them, and their recommendations were exactly in line with that.

"From the Finlayson standpoint, we want to pay people their monies and walk away from it."

Mr Finlayson denied claims that former City Markets staff were owed a combined $5 million in severance pay. Although he did not confirm the correct one, sources in the City Markets camp suggested it was closer to $3-$4 million.

And Mr Finlayson also told Tribune Business that City Markets and himself "did not contest" claims by 10 of the supermarket chain's former staff in Freeport that they should be paid a collective $189,000 in severance monies.

While the company had contested the injunction, which reserved funds from the sale in that amount to pay the former staff, Mr Finlayson said Justice Hartman Longley "did not agree at all" with the second part of the group's action - that demanding that they be paid their pension fund monies immediately.

Mr Finlayson said the judge split the case into its two issues, and found that according to the trust that created the staff pension plan, beneficiaries could not be paid before they were 55 years-old.

He added: "The trust can meet its obligations. It has no debt."

As to the status of City Markets' sale to Mr Roberts, Mr Finlayson told Tribune Business: "We have an agreement, and are just waiting on the lawyers on both sides to sort out the wording to make sure it's correct. Then we will sign the agreement, monies will be paid and change hands, and employees paid the necessary severance.

"I really hope that by the end of this week we're out of the picture altogether. We'll chalk this up to experience and move on to the next venture."