SHAREHOLDER creditors of Trimart will lose as much as $9 million following yesterday’s vote in favour of the supermarket’s proposal that they take substantially less than 50 cents in every dollar.
And according to president of the Barbados Chamber of Commerce, Andy Armstrong, it was proof of the volatility of the retail and distributive sector.
He said that other creditors who did not have a stake in Trimart would lose as much as $3 million and acknowledged that several business houses would find it tough.
“It’s the best option at this point, but it is going to be tough for all and sundry. A lot of creditors will be feeling a lot of pain,” he said.
Managing director of Star Chick, Wendell Clarke, said creditors would now be getting “chicken feed”.
“In December, the agreement was 85 cents in every dollar. Today, it has to be reduced to just 50 cents. It means we have lost over 30 cents in respect to the offer made by the prospective purchaser,” he said.
Clarke took issue with the lending institutions for making life tougher for Trimart and, in the long term, the creditors.
“It’s tough when additional financial stress and strain is placed on the supermarket to fulfil its obligation to its creditors. We are sad to see that a certain banking institution might have taken action to cause hurt to small creditors.
“It is a shame that a banking institution could have done such a thing to small people in this country.
“I am hoping there is time that they can revisit and address this matter to relief some of the burden facing some of the creditors who would have earned additional 30 cents if there was no interference by the bank,” he said.
Clarke, who is also president of the Barbados Agricultural Society and the Barbados Egg &?Poultry Producers Association, said the creditors felt short-changed.
“When we look at who the shareholders were, strong companies, we decided to give these people credit. Now for us to be left holding a bag is hard. We should get our monies back in full. It is unfair.
“What confidence does it give us in the future to continue to lend credit to these organizations when shareholders not support us as we thought they would.
“This thing has to stop in this country. We are having too many supermarket chains – Trimart, Harvest Mart, all these marts – consistently over a period closing down. The banks have played a role in this,” he said.
Clarke said the time had come for legal systems to be put in place to aid creditors who were trying to salvage funds from cash-strapped companies.
“It is not fair to us. We need proper representation. We need proper legal systems put in place to take care of people who are trying to do business to support this country.
“Business people are getting hurt, especially the small ones who cannot afford to carry this pain. If it continues this way, losing like this, we will soon find ourselves going under.”