Jam Teas repositioning Bay City to hold supermarket assets
Jamaican Teas Limited has bought out its minority partner in Bay City Foods and now owns 100 per cent of the non-trading supermarket company through a deal that closed October 1.
CEO John Mahfood said Jamaican Teas paid a nominal $1,000 for the 50 per cent holdings of long-time partner Amalgamated Distributors. He said Amalgamated did not have any interest in continuing in the retail business and that the deal would allow Jamaican Teas to resuscitate the supermarket company.
“It is really an internal reorganisation of our companies. Recall that Bay City was a supermarket that we owned in Montego Bay. We sold the supermarket, but we had the company, which wasn’t an operating entity,” Mahfood said.
Prior to the current transaction, Mahfood said that as a reminder, that four million JAMT shares were transferred to Amalgamated last September, at about $4 each, for a total consideration of around $16 million.
Mahfood reasoned that in buying out their partners, Bay City could be revitalised as the holding vehicle for Jamaican Teas’ remaining supermarket business at Chancery Street in Kingston, which trades as Shopper’s Delite. Instead of it being reported as an associated company, the supermarket operations would now be reflected on Jamaican Teas’ balance sheet.
“It will mean that for the next financial year, we’ll be reporting the full earnings for the supermarket in our income statement because we did not do so in the current year. We expect that to be about $450 million,” Mahfood said.
Jamaican Teas has plans to spend $80 million on renovation and expanded parking for Shopper’s Delite. The company bought an adjoining property and knocked down the existing structure to develop the parking spaces for the supermarket, which is popular among its customers and often runs out of parking spaces. As for the supermarket building, its existing 5,000 square feet of space will be slightly expanded and new equipment brought in, Mahfood said.
“What we’ll be doing next year is to do some renovation, introduce all new equipment, a small expansion, and really make it a nicer neighbourhood store for the people of Meadowbrook,” he said.
Meanwhile, in another segment of Jamaican Teas’ group operations, real estate, the upmarket Portview Apartments being developed at Manor Park should be ready by December. Mahfood says the contractor, Kinetic Construction, is expected to deliver the 18 units in time for them to be put on the market in January 2020. The units will be about 700 square feet each, with a price tag of $20 million.