Winn-Dixie to sell 12 Bahamas supermarkets

By Caroline Salls

Pittsburgh, March 30 - Winn-Dixie Stores, Inc. subsidiary Winn-Dixie, W-D (Bahamas) Ltd. will sell the 12 supermarkets it operates in the Bahamas, including nine under the City Markets banner and three under the Winn-Dixie banner, to stalking horse bidder BK Foods, Ltd. for about $50 million, according to a company news release.

To effect the sale, Winn-Dixie, W-D (Bahamas) Ltd. will sell its 78% majority stake in Bahamas Supermarkets Ltd., which owns the 12 supermarkets to be sold.

According to the release, all 12 stores are expected to remain open following completion of the transaction.

Under the terms of the agreement, subject to the outcome of the auction, W-D (Bahamas) will sell all of its shares of the common stock of Bahamas Supermarkets for 50 million Bahamian dollars. Bahamas Supermarkets' remaining stock will continue to be publicly traded in the Bahamas.

The agreement does not include rights to use any Winn-Dixie trade name or trademark, all of which will be removed from the stores in the Bahamas within six months of closing of the transaction.

"We have concluded that a sale of our Bahamian operation is in the company's best interest as we continue to sharpen our focus on successfully implementing our business plan and preparing to emerge from Chapter 11," president and chief executive officer Peter Lynch said in the release.

"Although the 12 stores in the Bahamas are profitable, they are not a core business for us. The additional liquidity generated from this sale will help Winn-Dixie support the remodeling of existing stores and development of new stores in our core U.S. markets."

Upon completion of this transaction, Winn-Dixie will operate 538 stores in Florida, Alabama, Louisiana, Georgia and Mississippi.

Winn-Dixie, a Jacksonville, Fla., supermarket company, filed for Chapter 11 on Feb. 21, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. The case was later transferred to the Middle District of Florida. Its Chapter 11 case number is 05-03817.

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