Response to the FTC Ruling AGAINST the BNTCL Sale to SOL Group by the Barbados Integrity Movement

Submitted by Neil a. Holder, Political Leader of Barbados Integrity Movement

 

Dear Barbadians,

We are exceptionally pleased with the ruling of the Fair Trading Corporation (FTC) in its decision NOT to support the sale of our National Asset the BNTCL at this time in its current form.

The Barbados Integrity Movement (BIM) sees this ruling as small victory in our monumental task of bringing integrity to governance and the delivery of prudent and transparent stewardship when given the mandate to make decisions on behalf of the people of Barbados.

Suffice to say that the Barbados Integrity Movement (BIM) has from inception called for the rejection of this transaction after its careful review of the documentation provided by the FTC which was prepared by the SOL Group for issuance to the Barbadian public for review where BIM has cited that this “Deal of the Century” would be extremely detrimental to our country!

We are happy that the concerns eventually highlighted by the FTC were in tandem with those raised by BIM in its petition and subsequent utterances in the media over a protracted period.

Since all of those concerns have already been vented and are now in the public domain, BIM proposes the following as the strategy forward:


  1. That All Barbadians be granted permission by the Minister of Finance to establish US Dollar (USD) Accounts in Barbados at the bank/financial institution of their choice.
  2. That these accounts will be interest bearing “Tax Free” accounts.
  3. Barbadians be granted the freedom to bring into the country any amount of foreign currency (particularly USD) from a legitimate banking institution once all KYC and AML regulations are met!
  4. That an Initial Public Offering (IPO) be put out for USD shares in the BNTCL whereas USD$100 Million can be raised through average Barbadians who may be interested in having shares in the ownership of the profitable BNTCL.
  5. The share capital of the BNTCL be evaluated based upon the present day value of the organisation taking into consideration the profitability.
  6. Issue an allocated sum of shares to be equally purchased in USD between the two petroleum products providers SOL and RUBIS.
  7. Issue an allocated sum of shares to be purchased by the Cooperative movement in Barbados.

In this regard, we feel that the aforementioned approach is fair and equitable to all parties.

National assets such as the BNTCL which has the potential to harm our foreign reserves and create unsavoury monopolies, unfair competition and potential loss of revenue to the Government of Barbados should Never be considered for sale!

The Barbados Integrity Movement (BIM) will not permit now or in the future a sale of the BNTCL to be approved unless the aforementioned conditions are met and Barbadians of all stations in life can own a piece of any such entity.

We wish all Barbados a HAPPY INDEPENDENCE DAY!

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42 Comments on “Response to the FTC Ruling AGAINST the BNTCL Sale to SOL Group by the Barbados Integrity Movement”

  1. Gabriel November 29, 2017 at 10:02 PM #

    Sounds good for a start.Tell us more.

    Like

  2. NorthernObserver November 29, 2017 at 10:54 PM #

    What is with USD? You expecting devaluation? Where are local buyers, not corporations with offshore operations, going to find the $US?
    This is not an ISM, can the BSE accommodate trades in a foreign currency?
    What % is being offered to SOL & Rubis?
    You know one or both of them are going to fund “other buyers”.

    Like

  3. David November 30, 2017 at 5:40 AM #

    It is worth a comment that with so much going on in the Barbados space the popular talk shows are off the air to make way for ‘commercials’.

    Like

  4. Pachamama November 30, 2017 at 8:41 AM #

    David

    Can you state, with clarity, what has been the decision – please?

    The last few postings on this matter leave this matter less than clear.

    Like

  5. David November 30, 2017 at 9:48 AM #

    @Pacha

    The FTC indicated it is prepared to approve the application of the merger IF, a big IF the following were addressed in the application:

    “The Board of the Commission, on November 23, 2017, determined that it would be prepared to approve the completion of the merger ONLY IF:

    a. The vertical alignment issues in the current transaction are addressed;

    b. The following clauses are removed from the Agreement and transaction:

    (i) A moratorium on the construction of any new terminal facilities or new import depots in Barbados for a period of fifteen (15) years from the transaction’s completion date. (ii) A moratorium on the issuing of licenses for the storage of gasoline, diesel, fuel oil, and aviation or jet fuels used for industrial and commercial purposes in Barbados other than those that currently exist for a period of fifteen (15) years from the transaction’s completion date. (iii) A 32% increase in throughput fees; and

    c. BNTCL Holdings Limited or any of its affiliates do not acquire an exclusive right of importation of oil products into Barbados.

    As such, the Commission cannot but decide against this proposed merger transaction in its present form.

    The Commission will assess any substantially altered transaction, including a relevant amended agreement, which may be placed before it.”

    The above conditions must be read in tandem with the following:

    ” Subsequently, the Commission made the following determinations on four (4) major issues identified with the proposed transaction:

    Issue 1: The Vertical Alignment of the Upstream and Downstream Markets — The Commission is of the view that this transaction in the upstream market for the storage and distribution of auto fuels, JetA1 fuel and HFO would significantly lessen competition in the relevant downstream markets of the retail of auto fuels and distribution of JetA1 fuel. The Commission believes that there could be foreclosure post-merger which would allow the Applicants to increase the cost to rivals, thereby leading to upward pressure on their sales prices. SOL could restrict or refuse access to current and potential Marketers at the Terminal, or offer access only on discriminatory terms. In addition, the possibility of SOL having access to sensitive information related to its competitors would be increased.

    Issue 2: Increase in Throughput Fees [Clause 11(xv)] — The Commission is of the view that the ownership of the bottleneck facility, along with the proposed higher throughput fees charged post-merger, may provide a sufficient cushion for SOL to engage in anticompetitive tactics in any of its downstream operations, which could potentially have a negative impact on consumers.

    Issue 3: The Fifteen Year Moratorium [Clause 11 (xvi)] — The Commission is of the view that the inclusion of Clause 11 (xvi) on the moratorium is inherently anti-competitive, restricts competition or potential competition, and is therefore contrary to the Fair Trading Commission Act CAP. 326B (FTCA) and FCA.

    Issue 4: Absence of Real Efficiencies — The Commission, having determined that the transaction is likely to substantially lessen competition, also considered whether they were real efficiencies which would be great enough to offset the potential anti-competitive effects. In the Commission’s view, the efficiencies put forward by the Applicants were not real but pecuniary and are neither greater nor more than what is required to offset the effects of any limitation on competition that is likely to result from the proposed transaction.

    Further, the Commission was of the view that the arguments advanced by SOL regarding the suggested positive impact of the proposed merger on the financial position of the Barbados economy, though compelling, did not sufficiently outweigh the competitive concerns raised.”

    On Thursday, 30 November 2017, Barbados Underground wrote: >

    Like

  6. Gabriel November 30, 2017 at 9:58 AM #

    Neil Holder
    You guys must have thought this through.Assuming you got what you ask for,tell us more of your plan.

    Like

  7. ac November 30, 2017 at 10:19 AM #

    The stipulations at the end of the summary/review/decision gives Sol a second bite at the apple
    Not over till the Fat lady sing

    Like

  8. BARBADOS FIRST/PATRIOTIC PARTY (BF/PP) November 30, 2017 at 10:30 AM #

    How about the worker?
    Provision should be made for the workers to own shares/options

    Like

  9. Jeff Cumberbatch November 30, 2017 at 1:59 PM #

    The stipulations at the end of the summary/review/decision gives Sol a second bite at the apple
    Not over till the Fat lady sing (sic)

    Freedom of contract, a constitutional right in some jurisdictions, permits parties to make any agreement they care to. However, in order for any such agreement to be regarded as valid, it must comply with the legal requirements.

    Like

  10. Gabriel November 30, 2017 at 2:04 PM #

    For example,the Andrews factory upgrade/development,the Hyatt ‘tower’,

    Like

  11. de pedantic Dribbler November 30, 2017 at 2:28 PM #

    Jeff, I don’t have your legal knowledge and nous so my response to AC’s post re “The stipulations at the end of the summary/review/decision” is vastly less accomodating. To the AC consortium I say that the FTC judgement respectfully advised that : the proposal was arrant BS bordering on the most egregious govt giveaway in our nation’s history!

    Second bite, be damned.

    The perfectly nuanced report – to AC’s chagrin I am sure – clearly stated the agreement MUST comply with the law. Which, in plain, blunt terms is saying that this proposal is considered to be absolutely contra acceptable Bajan law and thus should NEVER have been considered in its current form.

    It’s less a matter of a second bite of that cherry but rather a damning verdict that they need to go and start harvesting anew….wheel and come again, FRESH.

    We all await the govt and SOL retort.

    Like

  12. Well Well & Cut N' Paste At Your Service November 30, 2017 at 4:06 PM #

    I cant believe Jeff still has to explain this…wow.

    Like

  13. Bernard Codrington November 30, 2017 at 4:17 PM #

    de ped D, at 2;28 PM

    Are you sure you do not have Jeff’s nous? Or are you trying to fool this economist?Either way I share your position on this . Were it not inappropriate I would congratulate Jeff and his team for doing an excellent job. One that examined the issues from angles outside the narrow legal constraints.
    I must confess that I had borrowed Bushie’s whacker ( without his permission of course) just in case the decision did not reflect a social conscience.

    Like

  14. David November 30, 2017 at 4:22 PM #

    So far we have two major projects which are stillborn, Hyatt and BNTCL. We need to discuss how this impacts the economic planning given the current state of foreign reserves and the expectation these projects would have given a boost to the economy.

    Like

  15. bernard November 30, 2017 at 7:14 PM #

    I think there are more than two projects “stillborn”. If my memory is correct the private marina in Carlyle Bay that was to start in 2009 is in court. Andrews Factory is in court. We can’t find funding for a new cruise terminal. Samlords Castle has been pretending to start for over a year. It may be easier to count the “major projects” that we have had: 1) a very expensive BWA headquarters, while raw sewage flows in the streets for the past two years, 2) An unfinished SSA headquarters but no garbage trucks 3) Some VERY expensive high-rise towers for our lowest income earners. Did I miss anything?

    Like

  16. David November 30, 2017 at 7:25 PM #

    The two mentioned were given priority by government because they were positioned to delived 200 million to the treasury in cold US dollars. Some of us had our doubts.

    On Thursday, 30 November 2017, Barbados Underground wrote: >

    Like

  17. Pachamama November 30, 2017 at 8:58 PM #

    David

    Thanks

    The FTC and its Chairman must be lauded for a fair decision.

    It shows that ‘Fair” is not merely doublespeak.

    Let’s hope that the suitor and the political masters loose the appetite to divest this close to an election.

    That the incoming one is less inclined than they are expected to be.

    That the new Commission could act sensibly.

    That is one of the reasons a right to recall is infinitely more important than shiiite about integrity. Politicians have never dealt in that currency.

    Like

  18. Hants November 30, 2017 at 9:05 PM #

    Like

  19. ac November 30, 2017 at 9:13 PM #

    Comply it must ,,NO argument there ! but how is a decision rendered complete and final, When stipulations advises the competitor to review or consider their terms of agreement and if so done their is a room for re-negotiation at this highest order

    Like

  20. Jeff Cumberbatch November 30, 2017 at 9:50 PM #

    how is a decision rendered complete and final, When stipulations advises the competitor to review or consider their terms of agreement and if so done their is a room for re-negotiation at this highest order

    The decision is “NO…not as currently drafted”. A new agreement must be submitted. No re-negotiation!

    Like

  21. David November 30, 2017 at 9:58 PM #

    You really need to stop making an ass of yourself. Will you be telling the Chairman how to do the job next?

    Like

  22. millertheanunnaki November 30, 2017 at 10:07 PM #

    @ Jeff Cumberbatch November 30, 2017 at 9:50 PM

    “A new agreement must be submitted. No re-negotiation!”

    You can expect a joint venture ownership/operating agreement to be on the table ready for your ‘studied’ consideration.

    To whom should the miller send the finder’s fee solution invoice? Rubis or the FTC?

    Like

  23. millertheanunnaki November 30, 2017 at 10:19 PM #

    @ac November 30, 2017 at 9:13 PM #
    “Comply it must ,,NO argument there ! but how is a decision rendered complete and final, When stipulations advises the competitor to review or consider their terms of agreement and if so done their is a room for re-negotiation at this highest order”

    Imagine ac the prodigal daughter is no longer angela Skeete but is now a full-blown converted born-again backer of Privatization in all of its one-sided unfair forms!

    David of BU must be having kittens reading your pro-DLP privatization hogwash.

    Yes, ac the right hypocrite, continue to shit long overdue bricks of privatization pooh; it’s good for you!

    Like

  24. Jeff Cumberbatch November 30, 2017 at 10:30 PM #

    To whom should the miller send the finder’s fee solution invoice? Rubin or the FTC?

    @ Miller- The FTC is an impartial observer. Send your invoice elsewhere

    Like

  25. ac November 30, 2017 at 10:44 PM #

    Ok Jeff thanks for the clarification

    Like

  26. ac November 30, 2017 at 10:55 PM #

    David any one who is making ass of self is you.since you always seem quick to piss in your pants when a question or comment seems opposing wherby your intervention suggest that you have a big problem to disregard or be critical of any input other than those which you agree.
    You need to relax and let the forum be recognized as well it should be guarded and respected under the law of freedom of speech.

    Like

  27. David November 30, 2017 at 11:01 PM #

    You can take your yardfowl lying self and shove it.

    On Thursday, 30 November 2017, Barbados Underground wrote: >

    Like

  28. ac November 30, 2017 at 11:08 PM #

    On the subject of lies you need to take a good look in the mirror. Remember you are the one who says ac have a weave.
    Any hate to engaged with you or distract from the topic at hand but it is your own fault.

    Like

  29. Hants November 30, 2017 at 11:09 PM #

    @ David,

    Do you not ever feel inclined to ban people who cast aspersions on your character ?

    Buh doan mine me ….this is your blog.

    Like

  30. David November 30, 2017 at 11:14 PM #

    @Hants

    The better approach is to allow idiots to showcase their stupidity and also to see their irrelevance on the blog i.e. how others trivialize their contributions. Hopefully others will learn from the idiots. Have an aversion for dishonesty and yardfowls.

    Like

  31. ac November 30, 2017 at 11:28 PM #

    David what is irrelevant is your name calling , As the blog master you should be neutral and not show the urgency to be a political yardfowl , but then again you just cant help yourself

    Like

  32. DLP (Formerly CBC) TV and Radio December 1, 2017 at 2:54 AM #

    Oh A(ss) C(lown)….pipe down will yuh!!! why don’t you go and find some other family silver to sell off since the FTC tell wunna NO to the BNTCL sale!! Keeping noise on this blog for!! Betta do it quick though…foreign reserves tanking!!!..Barbados dollar at the precipice of devaluation!!! more credit ratings downgrades on the horizon!!…people getting more agitated!!!! Make better use of your time helping the DLP find solutions for Barbados!!!!!

    Like

  33. Well Well & Cut N' Paste At Your Service December 1, 2017 at 4:48 AM #

    AC Yardfowl..leave Jeff alone you clown.

    Any intelligent person long understood the outcome and requirements, but you want to live on his bones like the parasite ya are…

    ……today is Dec 1…..just .5 months left until yall asses are gone, that’s all ya need to know.

    Compris

    Like

  34. GreenMonkey December 1, 2017 at 5:30 AM #

    Establishment Politics Failing Worldwide – Prof. Richard Wolff

    Like

  35. Frustrated Businessman: Animal Farm sequel playing out in Bim. December 1, 2017 at 7:32 AM #

    David November 30, 2017 at 4:22 PM #
    So far we have two major projects which are stillborn, Hyatt and BNTCL.

    ……………………………………………………..

    Four. You forgot the Andrews Factory and Cahill teefin sprees.

    By my reckoning that just leaves Sam Lord’s Castle.

    Like

  36. Frustrated Businessman: Animal Farm sequel playing out in Bim. December 1, 2017 at 7:33 AM #

    bernard November 30, 2017 at 7:14 PM #
    I think there are more than two projects “stillborn”. If my memory is correct the private marina in Carlyle Bay that was to start in 2009 is in court. Andrews Factory is in court. We can’t find funding for a new cruise terminal. Samlords Castle has been pretending to start for over a year. It may be easier to count the “major projects” that we have had: 1) a very expensive BWA headquarters, while raw sewage flows in the streets for the past two years, 2) An unfinished SSA headquarters but no garbage trucks 3) Some VERY expensive high-rise towers for our lowest income earners. Did I miss anything?

    ……………………………………………………

    Yes you did, a few dozen back room deals that the public has no idea about until it is too late for transparency.

    Like

  37. Bush Tea December 1, 2017 at 8:13 AM #

    Jeff shows what a single HONEST and incorruptible MAN is able to accomplish.
    What a refreshing breath of fresh air in the stink of recent politics….

    Like

  38. David December 2, 2017 at 5:07 AM #

    SOL rubbishes the FTC decision:

    What the proposed sale means for Barbadians

    At Sol, our customers are our top priority and we have pledged our continued commitment to the communities we operate within. We are proud to call Barbados home and are committed to providing you with credible, easily-accessible information surrounding the proposed Barbados National Terminal Company Ltd. (BNTCL) sale.

    We have thus far respected the FTC’s investigative process as it relates to the proposed transaction and now that we have received a final ruling, we are reviewing the FTC’s decision regarding the transaction to determine how best to move forward with our proposal to purchase the BNTCL. Below, we are sharing the facts to address any queries you may have.

    1. Will Sol be able to import petroleum products after the privatisation of BNTCL? BNTCL does not import, own or sell any petroleum products — it merely provides through putting services (storage and transfer of petroleum products). Ownership of BNTCL would not allow Sol to influence or control the importation of petroleum products, because this is the responsibility of the BNOCL — a separate, government-owned entity. Sol has not requested any right to exclusively import products as part of the transaction nor does it intend to.

    2. Would Sol’s ownership of BNTCL allow Sol to control the pricing of fuel products? No. The pricing of any fuel products is, and would continue to be, the responsibility of the Government of Barbados, through the Division of Energy. If the sale were to be approved, the Government would retain regulatory oversight and control the final pump price to consumers.

    3. Would there be any increase for consumers at the pump, as a result of the proposed sale? If there is an increase it would be minimal. For consumers filling up on an average 45-litre tank, the proposed increase in throughput fees would translate into approximately BBD 0.02 (2 cents) per litre on gasoline and BBD 0.014 (1.4 cents) per litre on diesel at the pump. This means that four full tanks a month would result in an increase of less than BBD 5.00 per month to the average consumer.

    4. What would be the government’s role in BNTCL after its sale? It has been stipulated in the sale and purchase agreement that the Barbados Government will be issued with a ‘Golden Share’ which would allow it to maintain some control over the use and operation of BNTCL in the interest of the Barbadian public. From the onset of the transaction, Sol has advocated for the regulation of BNTCL’s throughput fees. The Government of Barbados, however, would need to establish the necessary framework for such regulation of BNTCL’s throughput fees post-merger.

    5. What structures would be in place to ensure that the current competitive landscape is maintained? Sol has suggested to the FTC (and is open to any suggestions from the FTC) to have conditions imposed on the merger which will address any competitive concerns pertaining to the transaction. Sol is willing to enter into binding agreements with the approved users of the BNTCL terminal and with the FTC in order to set definitive and fair operating standards to which the BNTCL terminal will be bound, and to ensure that all customers of the terminal, including Sol’s direct competitors, are adequately serviced on fair and non-discriminatory terms.

    6. How would the foreign exchange generated by this sale affect Barbados? The sale of BNTCL to Sol allows the Government to realise necessary foreign exchange to bolster a fragile foreign reserve position. As Barbados is currently below investment grade as a result of recent downgrades, an increase in foreign exchange reserves would help investors look more favourably towards Barbados as an investment destination.

    7. Will Barbadians be allowed an opportunity to invest in BNTCL?  The sale of BNTCL allows the public of Barbados to participate with a 35% ownership interest through an initial public offering. Under Sol ownership, the BNTCL will be a public company and Barbadians can become investors in its business. This creation of a new public company is extremely significant as it would give Barbadians an opportunity to receive benefits as a result of the sale of the BNTCL.

    Our dedication to this country remains steadfast and we will continue to look for ways to better respond to the needs of our most valued stakeholders – the Barbadian people. Sol is, of course, in the business of petroleum, but first and foremost, we are in the business of people.

    https://solpetroleum.com/sol-bntcl-sale/

     

    Like

  39. David December 6, 2017 at 5:44 PM #

    If we go by the news RUBIS and SOL appear to be working together to ensure the government secures that 100 million US dollars.

    Like

  40. NorthernObserver December 6, 2017 at 6:12 PM #

    Why not? Isn’t Mr Sol a staunch party supporter. From a business viewpoint, the KS business holdings are so large, and geographically diverse, that getting the money for the GoB is more relevant than adding another Bajan asset. If he could get away with a deal (steal), if not, split the cost.

    Like

  41. David December 6, 2017 at 6:14 PM #

    Simpson and government underestimated the due diligence/decision of the regulator maybe?

    Like

  42. Hal Austin December 6, 2017 at 6:24 PM #

    The better approach is to allow idiots to showcase their stupidity and also to see their irrelevance on the blog i.e. how others trivialize their contributions. Hopefully others will learn from the idiots. Have an aversion for dishonesty and yardfowls.

    The mob is always wrong. The moderator is the referee and must be impartial. It is tough, but try it and see.

    Like

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