The Barbados Chamber of Commerce and Industry (BCCI) today said it was satisfied that the bidding process for the sale of the Barbados National Terminal Company Limited (BNTCL) by the Barbados National Oil Company Limited (BNOCL) was properly managed, and that the sale will not adversely affect consumers.
The Sol Group, along with Rubis Caribbean, both members of the BCCI, were the only two companies to put forward proposals for the purchase of the entity.
A statement issued by BCCI Executive Director Lisa Gale said the subsequent selection of the Sir Kyffin Simpson-led Sol Group as the preferred bidder was based on the recommendation of KPMG, another BCCI member company, which acted as BNOCL’s advisors in the transaction.
The Chamber spokeswoman also said the sale of BNTCL did not appear to negatively impact the interest of the petroleum industry, the business community, or the local economy.
“The sale of this entity will attract much needed foreign currency to bolster the country’s foreign reserves. A position we know is much needed in these current economic conditions,” she said.
Gale added that several factors influenced the BCCI’s position, including the fact that Government, through the Division of Energy, will retain regulatory oversight and control the final pump price to the consumer. Sol’s ownership of BNTCL does not allow it to determine final pricing to the consumer.
“BNTCL will own the terminal and provide through putting services only. BCCI has been assured that it will not import, own or sell the product. This will continue to be BNOCL’s responsibility while the pricing of such product will continue to be the Government of Barbados’ responsibility,” Gale said.
She added that BNOCL will continue to import, own and sell petroleum products in Barbados, which will result in Sol having no supply pricing advantage over its competitors, along with regulatory and legislative protection afforded under the Fair Competition Act.
Another influencing factor, Gale said, was that Government was expected to retain one Preference Share as per the sale agreement, which will allow it to have some measure of control over the acquired company in the public’s interest.
“There is sufficient regulatory supervision and legislative protection to ensure that the competitors of the Sol Group in the fuel marketing and distribution market are not disadvantaged subsequent to the acquisition.
“BNTCL will continue to be bound by the terms and conditions of the existing operating agreements with BNOCL, and the marketers (Sol and Rubis). This serves to maintain the existing market structure with no adverse impact to competitors. It also . . . serves to protect consumers’ interest.”
The BCCI also said the acquisition does not change the market power or dominance of BNTCL, adding that Sol has proposed a post-completion regulatory structure that will serve to protect consumers from any price increases that may be deemed as excessive.
Thirty-five per cent of the BNTCL shares are to be made available for public purchase within three to five years of the acquisition.