Something Smells with the Brewery Share Offering and it is not Potter’s Cay Dock

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Bill 'Bacardi 8' Allen

What in the world is happening in this Country and why is the wutless media not dealing with the real issues? We here at BP smell a “rat” with the share offering of Commonwealth Brewery and pose the following questions to the Government.

1) Is Fidelity Bank & Trust the placement agent for the share offerring?

2) Is Sir William Allen the Chairman of Fidelity Bank and Trust?

3) Is Sir William Allen now or previously a Consultant to the Ministry of Finance? ( Some say he is the defacto Minister of Finance.) The same very one who raised the duty on the HOLY BIBLE?

4) Is Julian Francis the Chairman of the new board of Directors of Commonwealth Brewery?

5) Did both men previously serve as Governors of the Central Bank of the Bahamas?

Julian 'Mango' Francis, Fomer Chairman of BTC

6) Has the Central Bank of the Bahamas relaxed its lending policies for Fidelity Bank and Trust to grant 100% financing in the shares @10-15% interest when the rate of return on the shares would be no more than 7%?

7) Who advised the Government to pick up any residual shares via NIB in the Brewery, was it Bill ” Bacardi 8″ Allen or Julian ” Mango” Francis?

8) Who influenced the Central Bank to relax its lending guidelines for this transaction but it would not lower the prime lending rate to spur on economic activity to benefit the middle class?

9) Why would the Government allow NIB to invest in such a venture to encourage people to drink Liquor? would not these seem people seek NIB assistance when they contract liver disease and other illnesses from drinking?

10) When will the Government amend the laws so that minority shareholders may be protected?

11) Is the whole Government of the Bahamas Drunk from Kalik?

There are more questions, however, we will wait to see what the responses will be before we proceed further. There are too many conflicts of Interests going on in this Country and we are getting no answers. The Wutless, dingy Toilet Paper [Tribuny aka da Terch] is spinning and deflecting for PAPA and the FNM.

WE KNOW WE HAVE ALL OF THEM ON THE RUN. WE SEE THEM THIS MORNING TALKING FOOL ABOUT INCREASE IN READERSHIP AND SALES. SHOW THE PROOF!

Mr. Francis has not answered questions posed to him about his relationship with the Mango Card and Providence Financial Advisors and their relationship with BTC while he was Chairman and now this? WOW! What a Country.

WE need Change Real Fast before they get all of us drunk!

  • @ bahamianrealist, i may have the exact figures for the money that exchanged hands between tiger’s group and the brewery, however the substantive essence of my analysis of the IPO remains, i.e. well overpriced, not enough talk about the competition, no 10 years historical analysis in lieu of pro formas, comparison to cable bahamas, etc. etc. etc. while there may be a half-decent return at the end of the day, the bahamian public is being exploited similar to many other IPO’s that hit our market…there’s no real investment firm that critically analyzes pending issues…and for the government to be providing a guarantee i mean the evidence all points towards the fact that majority rule is a myth, the same gangsters that developed the bahamas pre-independence are still in control of our economy, our leaders from pindlin to ingraham to christie back to ingraham were all puppets, and therefore PLP and FNM are one in the same…(sorry for the non-partisan plug lol)

  • I would like for BP to be honest and let the public know if they are buying any of these shares. I for one will be buying whatever I am allowed because I know that at the end of the day it will be NOW MANAGED properly and I can guarantee you that we have enough SMART Bahamians who will take advantage of this. It only takes 7,500 people who want 1,000 each and it will be sold out

  • I sure hope some of the names mentioned here are not coming aboard with Bran and his team? Bran and his DNA party will die a sudden political death if he and his team insult Bahamians by bringing along a bunch of over exposed FNM free loaders. Bran has to seek candidates that are not only younger have a quality reputation but are what I would call ‘Retail Politician’s’ meaning the consumers (voters) will be comfortable interacting with ordinary folks and they must be willing to buy into what they are saying?

  • The only reason am going to support a Commission of Enquiry is to see the facts presented to support corruption and anyone found wanting will appear b4 the Courts.God willing I will use a Private Prosecution to put the targets of any malfeance b4 the Courts if any Govt is reluctant to do so.I would purchase shares in this company if am allowed to get my shares in BTC b4 the next three(3) years.A bone has been thrown out but no thanks unless BTC does the same now.

  • CONTD.

    THEREFORE THE PRESENCE OF THE NORMAL “SUSPICIOUS ACTIVITIES” ISN’T SUFFICIENT AS A CAUSE TO BACK AWAY FROM AN OTHERWISE RELATIVELY GOOD INVESTMENT OPPORTUNITY. OUR HISTORY IS FILLED WITH JOB FAVORS FOR REJECTED POLITICAL FIGURES AND THAT IS NOT LIKELY TO CHANGE IN THE NEAR FUTURE. ON THE MERITS OF THE INVESTMENT, THERE IS A NOTICEABLE DECREASE IN EARNINGS, DUE IN PART TO SMUGGLING OPERATIONS (FOREIGN BEER IMPORTS – BACKDOOR STYLE) BUT WHEN THAT ELEMENT IS CONSIDERED ALONG WITH THE IMPACT OF THE RECESSION ON LUXURIOUS PASTIMES LIKE BEER DRINKING, IT IS REASONABLE TO CONCLUDE THAT THE GENERAL PUBLIC HOSTED FEWER PARTIES DURING THIS 3 YEARS RECESSION AS COMPARED TO THE NUMBERS BEFORE THE RECESSION. AND PERHAPS PEOPLE DECREASED SPENDING BUDGETS FOR ALCOHOL PRODUCTS WHEN SUCH FUNCTIONS WERE HELD, THUS CONTRIBUTING TO THE LOWER REVENUE FIGURES. THE FACT THAT NO OTHER MARKET SHARE CAPTURING PLAN HAS BEEN PRESENTED DOES NOT MEAN THAT SUCH IDEAS DO NOT EXIST. TIME WILL TELL ON THIS POINT AND I AM PATIENT ENOUGH TO GIVE THEM UNTIL 2012 TO ROLLOUT SUCH STRATEGIES. THE GREATER NUMBER OF SHAREHOLDERS LOCALLY ALSO HAS THE NET EFFECT OF BRINGING WITH IT A LOYALY CONSUMER GROUP. CERTAINLY, ANY SENSIBLE SHAREHOLDER WILL BE COMMITED TO PURCHASING FROM HIS OWN COMPANY. THIS WILL BE A DIRECT INJECTION INTO THE CASH REGISTERS OF SALES INCREASE, RESULTING IN A BETTER PROFIT FORECAST GOING FORWARD.

    AS MENTIONED PREVIOUSLY, THE SOCIAL DYNAMICS OF GIVIONG BAHAMIANS AN APPETITE FOR INVESTING AND FORWARD PLANNING IS THE STRONGEST SELLING POINT TO ME. WE HAVE A NATION IN WHICH THE VAST MAJORITY OF PEOPLE RETIRE “BROKE” AND THIS IS BECAUSE WE HAVE EMBRACED CONSUMERISM AND REJECTED EVERY OTHER CONSIDERATION. THE MESSAGE ABOUT EMPOWERMENT MUST WALK ON THE LEGS OF BUSINESS OWNERSHIP AND SHAREHOLDER STATUS, OTHERWISE WE ARE ONLY TALKING TO HEAR OURSELVES. THE WESTERN WORLD IS REALLY DIVIDED INTO TWO (2) PARTS, THE HAVES AND THE HAVE NOTS (THE BUSINESS OWNERS AND SHAREOLDERS ON ONE SIDE AND THE WORKERS ON THE OTHER SIDE). THE ECONOMIC OPPORTUNITIES OUTSIDE THIS COUNTRY, WHICH HAVE THE POTENTIAL TO ENRICH MANY BAHAMIAN INVESTORS MUST BE OUR NEXT STEP. THIS OVERLY PROTECTIVE ATTITUDE TOWARDS US BY OUR GOVERNMENT NEEDS TO GIVE WAY (CALL OFF THE GUARDS AT THE CENTRAL BANK TO A GRTEATER DEGREE) SO THAT THE INFORMED AND COURAGEOUS AMONGST US CAN PUT MONEY TO WORK OUTSIDE OF THIS CLOSELY KNITTED, SLOW MOVING AND SMALL ECONOMY. THIS IS ONLY A FIRST STEP. AMEN.

  • Apart from alcohol consumption being a great contributor to the deterioration of our society, when I heard that julian francis will be appointed to the board of Commonwealth Brewery it confirmed that this investment was nothing to get involved in. You see hubert is always anxious to seal benefits for himself. The cable deal was so sweet and underwritten by our NIB money and money from our corporations because hubert was at the table looking after his own selfish interests. The BTC giveaway happened with julian francis at the table sealing the deal and the resulting benefits for hubert. Now with the Commonwealth brewery deal, once again julian francis will be placed at the table to seal another deal for hubert and to trap us into giving them our money. hubert has given an undertaking that the govt. will take up any shares not subscribed for!!!! WTF???? The only thing to explain this guarantee by hubert is a DEAL from which he is sure to benefit. If the shares were 2 cents each I would not put my hard-earned money on them. If they so care about us having investment opportunities, why didn’t they sell the 51% stake in BTC to us or at the very least why didn’t they sell the remaining 49% to the Bahamian public at the same price at which the 51% was sold? They must think we are the biggest jack—– EVER!!!!!

    • Amen, talking about seeing through the smoke screen.

  • CONTD.

    SO THE NEED TO BREAK AWAY FROM THE SAVING TO SPEND MENTALITY (REPRESENTED BY THE ASUE DRAW CONCEPT LOCALLY)IS AN OVERWHELMING CONSIDERATION AT THE MACRO LEVEL (IN MY OPINION). BY NO STRETCH OF THE IMAGINATION AM I SUGGESTING THAT THIS SHARES OFFER IS THE IDEAL THING, BUT THEN AGAIN THERE IS NOTHING BETTER OUT THERE RIGHT NOW AND NO SPECULATIVE CONSIDERATION GOES AS FAR AS CALLING IT A BAD INVESTMENT (ON THE FACE OF IT). IT IS NO CABLE BAHAMAS AND I DO NOT SEE SUCH APPRECIATION IN ITS FUTURE, BUT AN ACCEPTABLE RETURN WHICH GIVES THE WIDER PUBLIC AN APPETITE FOR INVESTING THROUGH SHARES PURCHASE IS A MAJOR ACCOMPLISHMENT BY ITSELF.

    BACK TO THE IPO, THE ABSENCE OF MORE CREDIABLE GOVERNANCE OVER THE SECURITIES MARKET IS NOT UNLIKE THE SAME SCENARIO BEING PLAYED-OUT IN THE MEDICAL FIELD AND LEGAL PROFESSION. THESE “PROBLEMS” EXIST TO THE BENEFIT OF A FEW (TO EXPLOIT AN UNAWARE PUBLIC) AND TO PLAY HOST TO UNSAVORY CHARACTERS AND UNETHICAL PRACTICES. THE SAME CORRUPTION THAT IS RAMPANT ELSEWHERE IN OUR COUNTRY IS PRESENT IN THIS AND OTHER DEALS JUST LIKE IT.

    TO BE CONTINUED

  • SORRY GUYS BUT I’M GOING IN THE OPPOSITE DIRECTION ON THIS ONE.

    (1) THE CONSUMER LOAN DOES EARN INTEREST AT A HIGHER RATE THAN THE (HISTORICALLY) DIVIDEND RETURNS ON THE SHARES TODATE, BUT THE CONSUMER LOAN IS JUST THAT – RELATIVELY SHORT TERMED. MY POINT IS THAT YEARS LATER THE DIVIDEND RETURNS (THIS ASSUMPTION IS TIED TO ALL THINGS CONTINUING AS IS OF COURSE) WILL EQUAL THEN EXCEED THE ENTIRE CONSUMER LOAN USED TO SECURE THE SHARES (PRINCIPAL AND INTEREST COMBINED). I DELIBERATELY DID NOT FACTOR IN THE POSSIBILITY OF SHARE APPRECIATION DUE TO GOOD COMPANY PERFORMANCE BUT THIS IS A “REAL” POSSIBILITY TOO WHICH ONLY MAKES THE INVESTMENT BETTER OVERALL.

    (2) WE NEED TO TURN THE PAGE ON RUN-AWAY CONSUMERISM (BAHAMIANS) AND THIS IS AS GOOD A FIRST STEP TOWARDS THAT CHANGE AS HAS BEEN PRESENTED IN DECADES. BAHAMIANS MUST LEARN TO PUT MONEY TO WORK (AND NOT JUST WORK FOR MONEY).

    …. WILL CONTINUE MY POINTS IN SUPPORT OF THIS KIND OF CHANGE WITHIN OUR SOCIETY (ON A LARGER SCALE THAN CURRENTLY EXIST) LATER … GOT TO GO.

  • There BP goes again. Another “connect the dots” conspiracy theory to see every single thing the Government does as a glass half empty rather than half full. No wonder you are not considered a reputable news source. Where is the balance?

    Rather than asking the questions above, how about we rewind and ask these one:

    Why has a Bahamian company ABDAB chosen to sell-out to the foreigner (Heineken International) 100% of Commonwealth Brewery considering the cry of so many Bahamians all of a sudden about foreigners taking over?

    Who is the principal shareholder in ABDAB?

    The government made it a condition of the sale that Heineken offer 25% shares of Commonwealth Brewery to the Bahamian public ensuring that Bahamians could have a stake in an industry that they support through their liquor consumption.

    Fidelity is a bank and offering financing for the shares is to afford many people an opportunity to buy shares that simply may not have the funds right now to do so before the offering closes on April 15th. You are correct that the dividend yield will probably be no more than 7% per year but that will be for every year to come and the loan people take out should be repaid in a year or two. Share price appreciation should make for a good return on the investment combined with the dividends to make the financing costs worth while.

    On the issue of government supporting private businesses through purchasing shares, I don’t approve of it except in certain cases. Government agencies bought shares in Cable Bahamas at $1.00 and has received an excellent return. The government has agreed to purchase the balance of the 25% shares being offered in Commonwealth Brewery left after all demand from the public is satisfied, should it not be fully subscribed. In this case I do think it is a good investment for NIB to make considering it has problems finding good investments to go into to earn a reasonable return on our social security funds.

    I thank the government for ensuring that each Bahamian has an opportunity to own a piece of a company that is supported by many thousands of Bahamians on a weekly basis.

    • IKB

      Yea but you’re being encourage to burrow,for what could be a consumer loan of 18%, for a return of 7% and if mikelarry242 is correct, that promise 7% yield maybe a far reach at best!

    • bahamianrealist, to answer your question why ABDAB sold out to foreign is that heineken put pressure on tiger finlayson to turn over control of the brewery/burns/butlers group due to poor management, thus while tiger’s group maintained ownership control, management control was turned over to heineken…that didn’t bode well for huge egos…eventually the next best thing was to payout tiger’s group at a handsome price (i believe about $50m or close) therefore, the fundraiser for $62.5m…it appears to be an ok investment on the surface but i still believe it was overpriced at $8.33 per share, particularly when there are no strategic initiatives on the table to boost revenue lines etc. the money is being raised only to replace an unhappy shareholder…now the end result is raising $62.5m but the prospectus doesn’t speak much of the competitive pressures forcing revenues down over the last 3 reporting periods…further the lack of pro formas is startling at this level of public fundraising and a company with such a long track record not providing at least 10 years of history is equally startling so that the potential investor is able to assess how well their investment may perform over a complete business cycle…all of those backstops was in anticipation of a not so good share subscription i.e. our prime minister guaranteeing a subscription shortfall, fidelity providing 100% financing (when prudent banking practices calls for only 50% financing), and the late advertisements tell me it’s not being sold as fast as it can be…but what if the company’s performance continues to decline because I was not impressed with the prospectus seeking soo much money…there are fundamental uncertainties that the prominent financial analysts should have jumped on in order to ensure the bahamian public receives the best price for the quality of this issue…to compare it to cable bahamas which had a monopoly plus shares were purchased at $1.00 by the government is a far cry from the bahamians purchasing in a competitive market with declining revenues and not much of a plan to give a sense that it will be better…so to put it into perspective as to proper value of the brewery…cable bahamas is trading at about $8.75 currently on widely held shares and a monopolistic history and a lean machine poised to face increased competition…however, the brewery is offered at almost the value of cable bahamas at $8.33 when it’s shares are only coming to the market for the first time…now if you ask me, cable bahamas is a much better company, less overheads, etc. and should be priced well above the brewery, so to me, the brewery on those basic fundamentals is not worth much more than $5.00 per share…hence my conclusion that people may still make a half-descent return but it was oversubscribed…trust me when i say i wouldn’t be surprised if the value of brewery dropped over time before it starts to rise again…but the government and private sector continues to take advantage of a young investing public…shame on all the analysts in the country that are not revealing these realities to the bahamian public…but i understand, it’s not popular for analysts to be critical of IPO’s because they will never get an opportunity to sell the next IPO, so everyone silently promotes a sell high sell high sell high philosophy…

      • @ mikelarry242, A few good points but a little off track because of incorrect facts. It makes no sense that Heineken would buyout ABDAB at a value much more than what the company is worth. It was reported that the 25% shares are being offered at the same price per share paid by Heineken plus the cost of the IPO. This would make the buyout to be around 240milliom not 50million as you stated, assuming $8 per share and 33cents per share being the cost of the IPO.

        It’s important to note that the 25% shares being offered are a quarter of the 100% shares presently owned by Heineken having already bought out ABDAB therefore the 62million will go directly to Heineken and not stay in the company.

        I have read the prospectus and I did also notice the 2million fall in revenue between 2008 and 2009 and a further 2.5million fall between 2009 and 2010 but that is to be expected because of the downturn in the economy over the last few years and also the competition from Sands in the beer market. What is important to note is that even with the revenue decline the company has increasing Net Income over the last 3 years from 14million in 2008 to 16million in 2009 to 23million in 2010. That shows a strong company who has made adjustments to control costs which has resulted in increased profits.

        I would expect that revenue growth for the company is not going to be double digit because the market is already almost fully tapped, who drinks, drinks and who doesn’t, doesn’t. Any significant growth in revenue could potentially come from Bahamar in 2014 or maybe a takeover of a competitor.

        Now on share price appreciation, that is a tricky one and I myself am teetering on whether to invest in the IPO as I am mainly looking for growth in the share price once the shares are on BISX. The history of share price appreciation for our local stocks is not a great one in the short term so those seeking a quick (1-3 years) share price of $10 may not get there, in fact it may go below $8.33 as you indicated.

        On Cable Bahamas I do think that their current share price on BISX is undervalued but this is probably because of the pressure over the last few years of people having to sell their shares in a bad economy forcing the share price down. This has also happened with Bank of Bahamas shares.

  • even the deal itself is overvalued…BV per share of about $2.20 against an appraised value of $8.33 per share, declining sales for the last 3 years, no financial pro formas to see how they plan to deal with it or if the people money safe, in the absence of pro formas the company should have at least provided 10 years of historical financials so that people could assess their ability to navigate a complete business cycle, no useful purpose for the $60m+ to be raised, and there was a shameful competitor analysis…essentially, the public is being raped for lack of alternative investment opportunities…not saying there may not be a half-descent return on your investment, but it is in my opinion overvalued…but the regulators are silent, the financial analysts are silent, government pushing a private sale and guaranteeing to pickup any subscription shortfall…yall aint see nothing yet, wait till the government decides to sell 25% of the BTC/C&W company to the bahamian public, we will truly be raped because they stand to raise up to $500 million from that transaction which when you look at it, the bahamian public will have financed the full value of the shameful BTC transaction through the backdoor…above all, all our politicians silent, FNMs i understand their silence, PLPs they getting their cut, third parties looking for their opportunity to join forces with the PLP or FNM, so the bahamians are screwed…AGAIN!!! for 40 years, we have been screwed in like manner and yet people still loyal to ingraham, christie and pindlin…lawd help us all…caus the foreigners don’t care and our leaders have facilitated their exploitation of our strategic economic interests for over 40 years…we are destined to remain workers in our own economy…hence the celebrated national D+ average…

    • Well said… enough to ponder!!

  • Right now, I can’t see the city for the smoke and I refuse to lend these people who already has money my monies to help them further there agenda and I know they will pay me back my monies piece, piece, sending you these small cheques in the mail what even isn’t worth the paper it’s printed on. I already got swung with Colina and Cable Bahamas when they were offering shares, the rate they paying me, I will be an old and gray woman before ever see a profit. Thanks, but no thanks.

  • IKB

    Everyone hand, eye, teeth and bungy in the cookie jar! This is some serious peas soup, mixed up like conch salad! Well crab fat n’doug!

  • Grasping again….
    a) why does the govt has to answer half the these questions when google can answer them for you
    1) yes
    2) yes..
    3) perhaps yes
    4) yes
    5) yes
    6) a) are the lending policies out of policy? even if so which policy is it?
    b) U should be asking Governor Wendy Craig this..and
    c) We cant rely on the govt to stop persons from not usign thier brains, you make a dumb investment thats up to you..in 3rd grade they teach you that 10 is more than 7
    d) who knows what any future rate of returns will be?

    7) or was it Zhivargo Laing? or was it the board of directors at the Central Bank or was it the Permamnent Secretary or was it the Financial Secretary…or was it The Prime Minister…
    …also what is the exact policy that was relaxed?
    8) Look how well the middle class of the US is doing with near 0 interest rates for the past 3 years..

    So here is probably thier train of thought. they looked at the US over the years and saw Easy credit + predatory lending + housing boom + housing bubble + leveraging off this boom + low interest rates + backing evertyhing off this debt via CDOs, CDSs etc..which collapsed then…the US economy gets in the tank. Fed says lets fight it with easier credit and historiically low interest rates, the banks still were’nt lending…and….for 2 years the eocnomy gets worse.

    rememebr the central bank also has figures that payments on exisitng debt is at its higest deliquincy rate so they probably said..lets not encourage even more deliquncies.

    However they should have if they would like to see lower debt repayments since the govt borrows at prime + x.

    9) Lets see NIB also owns a large amount of Cable Bahamas…where persons watch violence, sex, cussing, fornicating, drinking..or they can surf the net for these things etc.
    They own a large amount of BTC where they allow them to surf for the above.
    They allow 99% of the ‘bad’ movies to come in and license the theatres and take their money.
    They license and take fees and taxes from them as it is, inconjunction licensing the strip clubs and the number houses.
    In fact…NIB gets MOST of its revenues from returns on its investments. Even more so than its contributions.
    Also, if you force a company to issue shares to the public, you should at least guarantee them something.
    10) This question is so open. Protected from what? Stray dogs?
    11) They been drunk for decades now.

    • media

      THANKS INGRAHAM THANKS! YALL HAVE NO DAMN SHAME!

      BP

  • WOW! WOW! WOW! THANK YOU! BP THANK YOU!. I was just about to purchase 500 shares, the deal sounded too flipping sweet. I AM SO HAPPY YOU GUYS POSTED THIS! THANK YOU! BP THANK YOU!

    • media

      OPEN YA EYES if NIB gata buy them and they offering 100% financing ya know something can’t be right!

      BP

  • BP. yall like wine get better with time.

  • It stinks to high heaven BP!

    • media

      So was the BTC deal. WE NEED CHANGE!

  • everything same to stink in this country cant u see flies all over the place

  • don’t do it BP don’t do it!!!!!!!!!!!!!!!!!!!!!!!!!!!!