JAMT reshapes retail holdings in Bay City deal
Published:Thursday | December 27, 2018 | 12:00 AM
Jamaican Teas Limited said its retail subsidiary says that JRG Shoppers Delite Enterprise Limited, has signed a sale-and-purchase agreement that will result in the disposal of its minority stake in Bay City Foods Limited, a supermarket operation in Montego Bay, in a $172 million deal.
The sale is to be completed by the end of the March quarter, the tea company said in a market filing.
Jamaican Teas expects to book a gain of around $150 million from the transaction but notes that the deal would not have a material impact on the assets and profitability of the company, which trades as JAMT on the stock market.
Bay City is a non-operating business, which had been a lossmaker for its owners. Now, Jamaican Teas' partners in that business will take a stake in JRG Shoppers Delite as part of the current deal, but Bay City will continue to exist.
"We shut it down and sold it because it was not doing well," said Jamaican Teas CEO John Mahfood on Thursday.
"Our partners and I thought that we would resurrect the company, and we would put it under our other supermarket that we have in Kingston so that they could continue in the supermarket business," Mahfood told the Financial Gleaner.
JRG Shoppers Delite, which is in the retail distribution of consumer and household products, will continue to operate under that name but under the umbrella of associated company Bay City Foods.
Mahfood said that the transaction did not that mean Jamaican Teas was trying to raise capital. However, he reaffirmed that KIW International, in which Jamaican Teas acquired controlling interest in 2017 from the Government of Jamaica, will be going to the market in early 2019 to raise between $500 million and $1 billion to fund investments by that company.