A Barbadian-owned Caribbean company, SOL Investments, that has a footprint spanning across the region is about to change hands, ceding controlling ownership to a Canadian concern for US$1.21 billion.
Though it will retain day-to-day administrative responsibility over 23 enterprises that it owned, SOL’s sale, which is pending regulatory confirmation, means that control of this Caribbean company goes to Canada-based Parkland Fuel Corp.
Built up by entrepreneur Barbadian Kyffin Simpson over 13 years SOL is now regarded as a regional fuel processing and supply and giant, touching almost all territories of the Caribbean.
“Our fuels, lubricants, LPG products and extensive service station network provide the energy that keeps the heart of our region beating. We are the largest independent petroleum marketing company in the region,” SOL boasts on its website, adding “we serve a wide range of commercial customers who are involved in shipping, luxury boating, aviation, mining, trucking and fleet operations, as well as families and individuals”.
As the premier Caribbean fuel marketer SOL reportedly supplies and markets 4.8 billion litres annually across the 23 territories in the region.
The company has 526 retail gas stations, 32 import terminals, and 10 charter ships.
Headquartered in Barbados, SOL’s transition of 75 percent of its shares to the Canadian fuel dealer, with interests in north and central America, means a revenue windfall for Barbados.
It also means that the sale must get regulatory approval from the island’s Fair Trading Commission. That go-ahead appears very likely.
Barbadian financial analyst Jeremy Stephen has said that the deal which is expected to be closed by year-end should profit the Kyffin Simpson family by as much as $500,000 million before taxes, and benefits to the island could come in taxes on the transaction along with foreign currency inflows through Parkland’s payments to SOL’s outstanding bills.
“The cash might not land here in totality but . . . knowing how these deals work, some part has to come back to cover taxation, some part has to come back to pay off creditors,” the Nation newspaper quoted Stephen saying
While Barbadian and other Caribbean persons rue the loss of the iconic Caribbean company, it is worth noting that the forfeiture could have been larger if a SOL plan to buy the Barbados state-owned oil distribution company had not been halted last year.
As a money raising measure, the island’s previous government that was voted out of office on May 24 had planned to sell the Barbados National Oil Trading Company Ltd. to SOL for $100 million.
BNTCL imports all petroleum products for use in the island and on-sells them to two local distributors, SOL and RUBIS.
RUBIS objected to the sale and while this competitor had moved to the court seeking a halt to the process, the Fair Trading Commission anyhow rejected the proposed transaction because it gave SOL an uncompetitive advantage.
Had that 2017 sale of the state-owned company gone through, it would have enlarged the pot of Caribbean enterprises now sold to the Canadian dealer.