NEAL & MASSY HOLDINGS LIMITED

Transcription

1 This document is important and requires your immediate attention. If you are in doubt as to how to respond to the Neal & Massy offer you should consult your investment advisor, stockbroker, lawyer or other professional advisor. DIRECTORS CIRCULAR IN RESPECT OF THE OFFER BY NEAL & MASSY HOLDINGS LIMITED To Purchase Any and All of the Outstanding Ordinary Shares of THE BARBADOS SHIPPING & TRADING COMPANY LIMITED While the cash price offered of BD$8.50 is favourable to shareholders as compared to the existing offer of $8.00 from AMCL Holdings Ltd, with regard to the various reasons contained in this Circular The Board of Directors recommends that Shareholders do not accept either offer at this stage. Shareholders are however urged to seek independent investment, financial and legal advice in respect of their own circumstances. Notice To Shareholders The offer to which this Directors Circular relates is in respect of the securities of a Barbadian Issuer and while the Issuer is subject to Barbados and Trinidad and Tobago disclosure requirements, shareholders should be aware that such disclosure requirements may be different from those of other jurisdictions. The enforcement by non-barbadian investors of civil liabilities may be affected by the fact that the Barbados Shipping & Trading Company Limited ( BS&T or Company ) is a Barbados corporation, that most of its directors and officers are Barbadian residents and that a majority of its assets are located in Barbados. This Directors Circular has not been approved or disapproved by any securities regulatory authority nor has any securities regulatory authority passed upon the fairness or merits of the circular or upon the adequacy of the information contained in this document. 11 SEPTEMBER 2007

2 Table of Contents Page Directors Certificate 17 Directors Circular 3 Circumstances Under Which This Circular Is Issued 3 Obligations of The Directors 5 Assessment of The Terms Of The Neal & Massy Offer 6 Board Recommendation 8 Reasons for Recommendation 8 The Board s Intentions 9 Right to Withdraw Deposited Shares 9 Form for Notice of Withdrawal Of Shares 11 Other Information 12 Financial Information (Appendix 1) 18 2

3 DIRECTORS CIRCULAR This Directors Circular is issued by the Board of Directors (the Board) of The Barbados Shipping & Trading Company Limited ( BS&T or the Company ) in connection with the offer made by Neal & Massy Holdings Limited ( Neal & Massy or N&M or the Offeror ) to purchase all of the outstanding ordinary shares of BS&T for cash or a combination of cash and shares in the capital of Neal & Massy as set out in its Offer for Purchase dated 28 August 2007 and Notice of Variation dated September 1, 2007 (collectively referred to herein as the Documents ). All information contained in this Directors Circular relating to the Neal & Massy offer has been taken from or is based on information disclosed in Neal & Massy s Offer and Take-over Bid Circular and other public sources. The Board does not assume any responsibility for the accuracy or completeness of such information. All dollar amounts in this Directors Circular are expressed in Barbados dollars (BD$), unless otherwise indicated. CIRCUMSTANCES UNDER WHICH THIS CIRCULAR IS ISSUED Unlike the case of the initial offer by Ansa McAl, through its wholly owned subsidiary AMCL Holdings Ltd, which was the only offer to be considered by your Directors at the time of issuing our Circular of August 6, 2007, the Company s shares are now subject to a bidding process with the entrance of Neal & Massy. As at the date of this Circular, only the above mentioned parties have made offers to all shareholders and while there are reports in the press to the effect that there is a third offeror your Board of Directors has not received any other offers in compliance with the Take-over Bid Regulations. BS&T s shares however continue to trade on the stock exchanges of Barbados and Trinidad & Tobago and all shareholders are entitled to sell their shares by that means if the price being bid is acceptable to them (or to acquire more if they so choose). As at the date of this Circular, Neal & Massy is offering to acquire any and all of the outstanding Ordinary Shares of The Barbados Shipping & Trading Company Limited by way of : (a) Cash at the price of BD$8.50 (or US$4.25 for non-residents of Barbados) for every one (1) ordinary share of BS&T ( N&M Cash Consideration ), or (b) A combination of one (1) Ordinary Share in the capital of Neal & Massy for every 2.75 Ordinary Shares in the capital of BS&T plus BD$1.80 (or US$0.90 for non-residents of Barbados) cash for each BS&T share ( N&M Combination Consideration ). Shareholders are permitted to select either option for all of their shares or option (a) for a portion of their shares and option (b) for the remainder of their shares. The Neal & Massy offer is currently scheduled to expire on October 18, AMCL s offer of BD$8.00 per share was due to expire on September 6, AMCL has extended the expiry of this existing bid to September 21,

4 While the bidding situation that now exists may not result in the best outcome for the business and other stakeholders, shareholders desirous of selling their shares may opt to receive the highest price available for passing control of the Company to a successful bidder, assuming there will be a successful bidder as both bids have certain conditions. BS&T as an Independent Business Notwithstanding the above, the Board of Directors takes this opportunity to remind Shareholders that on proposing the merger with Neal & Massy, it was never our intention that Shareholders exit their investment in BS&T or to put BS&T up for sale. Rather, it was an option seen to be in the best long term interest of the two companies and their shareholders with continued investment in an expanded enterprise. BS&T is capable of operating independently and has the means to continue to drive operational improvements where necessary and to grow and develop its businesses as our results in recent years demonstrate. Clearly, the companies bidding for BS&T recognise its worth and progress and Neal & Massy would never have been interested in a merger combination unless BS&T was viewed as desirable. Neal & Massy s cash offer for BS&T is not at a value which is higher than the intrinsic value range which informed the basis for the proposed merger. It represents an offer for shareholders to cash out at the cost of debt and capital to the acquiring company (and to the resultant combination of the companies, if successful) instead of having those funds remaining invested. Expansion of BS&T s Business Interests Contrary to the erroneous view held by some that BS&T needs to be acquired in order to grow its business, BS&T has not been standing still in its expansion thrust, particularly outside of Barbados. Our subsidiary, United Insurance has, for several years, been growing its business beyond the shores of Barbados and is represented today in 14 countries across the region through agencies and with a branch office in Trinidad, generating more than 60 percent of its premium income from outside Barbados. Seawell Air Services entered into a joint venture with LIAT to provided various airport services in Antigua as recently as three years ago following the parent company s entry into the supermarket business in St Lucia with St Lucian partners - indeed BS&T increased its stake in Gablewoods Supermart Ltd to 33% in July of this year. Moreover, within the last two years, other sizeable investments have been made such as our participation in the acquisitions of two hotel properties which in turn facilitate the growth of our Associate, Almond Resorts - one being Morgan Bay, St Lucia and the other Casuarina Beach in Barbados. Following these was a 33% stake in a business in The Bahamas comprising 12 supermarkets, albeit that it is subject to the approval of the Bahamian government. While returns on these recent investments are not yet being realised, they are expected to contribute meaningfully in the coming years. Further and for the future, we are even now actively evaluating other opportunities that are before us, in and outside of Barbados. BS&T also possesses certain property assets which have the potential for future earnings notwithstanding that the projects earmarked for several of these properties vary in complexity and require that feasibility criteria and/or regulatory approvals be met before proceeding. BS&T s Balance Sheet is strong and underleveraged, meaning we are capable of sourcing debt financing on 4

5 reasonable terms for further expansion. Also, the Neal & Massy shares which we hold, for which only dividend income is earned, can be sold at the appropriate time to provide funds for new projects or the acquisition of new businesses, the future earnings of which would be accounted for in our Group results. The best source of information on BS&T s operations and financial affairs is contained in our most recent Annual Report, augmented by our published results for the first half of the 2006/07 financial year as well as at the third quarter of this 2006/07 financial year, included in this Circular as Appendix 1. These results reflect increasingly better performance for our operations as a whole resulting from various initiatives that are being taken by management. While therefore any take-over offer may afford shareholders a liquidity event, shareholders should recognise that it was not the intention of Directors to put BS&T up for sale. As outlined above, BS&T is well positioned to take advantage of regional opportunities which are appropriate for its relative size and strategic fit. While this positioning may not be translated into the cash value for BS&T s shares today, it is available for those who invest, or remain invested, in BS&T. Shareholders should thus determine whether they wish to accept cash today instead of remaining invested in the Company going forward and benefiting from its future growth. OBLIGATIONS OF THE DIRECTORS Under The Companies Act Cap The Take-Over Bid Regulations, 2002 of Barbados, and the Securities Industry (Take-Over) By-Laws, 2005 of Trinidad & Tobago, the Board is required to issue a Directors Circular in response to any properly submitted Take-over bid. In summary, the Board is required to : - provide either a recommendation to shareholders with respect to acceptance or rejection of the takeover bid or a statement that they are unable to or will not make a recommendation. In all cases the reasons why must be given; disclose what course of action the Board plans to take; and provide up to date information on the company and the position of the Board; disclose certain other relevant information including that relating to shareholdings of directors, officers, significant shareholders. Notwithstanding the above, under the Companies Act Cap 308 of Barbados (the jurisdiction under which the company is incorporated) within Section 95, the Duty of Directors and Officers is stipulated as follows: (1) Every director and officer of a company in exercising his powers and discharging his duties must (a) act honestly and in good faith with a view to the best interests of the company; and (b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. (2) In determining what are the best interests of a company, a director must have regard to the interests of the company s employees in general as well as to the interests of its shareholders. 5

6 (3) The duty imposed by subsection (2) on the directors of a company is owed by them to the company alone; and the duty is enforceable in the same way as any other fiduciary duty owed to a company by its directors. In considering a take-over bid for the Company, your Directors must therefore take into account not only the collective interests and various circumstances of the shareholders but very importantly the best interest of the Company through which the interest of shareholders is served. The Company s other stakeholders, including staff, must also be considered. In this regard, the Board also has to consider that one of the bidders may achieve their goal but without 100% of BS&T s shares being acquired. In both cases, and subject to any variation of their offers, the successful bidder could attain ownership of between 50.1% and 100%, meaning that a significant minority of shareholders could remain, and the Board needs to consider the future of the Company as it relates to those shareholders that may choose not to tender their shares, or not be in a position to so do. This means that Directors may, upon taking all aspects of competing offers and various stakeholders interest into account, recommend an offer that provides better prospects for the Company and its wider stakeholders but which may involve a lower cash value than another. THEREFORE THE RECOMMENDATION OR CRITERIA FOR A RECOMMENDATION OF THE DIRECTORS MAY NOT BE BEST SUITED TO EACH AND EVERY SHAREHOLDER, particularly those who wish to exit their investment. ASSESSMENT OF THE TERMS OF THE NEAL & MASSY OFFER 6 i) ii) iii) iv) The Neal & Massy offer is conditional on Neal & Massy achieving an overall ownership in excess of 50% and as such is not a certainty. However Neal & Massy could have a higher chance of success in this respect than Ansa McAl through its subsidiary AMCL Holdings due to Neal & Massy only requiring an additional 27.5% of BS&T whereas AMCL requires 50.1%. As stated in their offer, Neal & Massy has other conditions which relate to the well being of the company and certain events which are not unusual and which generally also apply in the case of Ansa McAl. The risk of the Fair Trading Commission of Barbados triggering the condition whereby Neal & Massy would withdraw its offer is low due to the absence of similar or competing businesses in Barbados. To put this in the context of the two offers made to shareholders, the risk of this condition is more likely in respect of the offer by Ansa McAl. In contrast to ANSA McAL s proposed consolidation and streamlining of the business enterprises of BS&T with those of the ANSA McAL group, Neal & Massy has recognised that this is not applicable upon the acquisition of BS&T due to the absence of overlap of similar businesses of its own within any one country. To the contrary, Neal and Massy has demonstrated that the businesses are highly complementary and has further stated that it intends to operate BS&T as a long term going concern within a Caribbean regional context. Streamlining by associating two or more companies in similar but non-competing business activities across countries (such as supermarket operations), is however to be expected and should be beneficial rather than a basis for concern. Neal & Massy makes no statement that there will not be disposals of any assets, as indeed neither has Ansa McAl. Given the price being offered for BS&T s shares, your Directors consider that the possibility

7 exists that certain assets may be disposed of by either of the successful bidders in pursuit of reducing the debt incurred by undertaking the acquisition of BS&T. Subject to the level of acceptance of either offer by shareholders, the outlay which would be incurred by Neal & Massy will naturally be less than that of Ansa McAl due to Neal & Massy already owning 23% of BS&T, but in either case the debt will be significant. Such disposals, if any, do not necessarily involve the loss of employment (for which Neal & Massy has given certain assurances in their offer document) but the disposals could deny the Company future earnings in relation to such assets. v) The N&M Combination Consideration provides the option for all Shareholders to have a stake in Neal & Massy (which would include ownership in BS&T), unlike the Ansa McAl Investment Election which is discriminatory as it is open only to shareholders resident in Barbados or Trinidad thereby unfairly disregarding the interests of a number of shareholders. vi) vii) viii) Under the N&M Combination Consideration, BS&T shareholders have the legal right to require that the offered shares be provided whereas the Ansa McAl Investment Election which is subject to various third-party and intermediary arrangements, can be withdrawn by Ansa McAl even if the AMCL cash offer succeeds. The Neal & Massy Acceptance and Transfer Form conveys upon Neal & Massy the authority to act with Power of Attorney only with effect from the date that Neal & Massy declares that it is proceeding unconditionally to take up the shares tendered to their offer. It is clear and unambiguous that Shareholders retain their rights including the ability to vote their shares until such date. The Board believes that Neal & Massy is a significantly better acquirer for the business than Ansa McAl. Neal & Massy and BS&T fit operationally very well together (such as the alignment of the Hi Lo supermarket chain in Trinidad with BS&T s Supercentre chain in Barbados) and have similar corporate cultures and values. Neal and Massy knows your company better and many of the BS&T stakeholders have a first hand appreciation of the way Neal & Massy operates. Neal & Massy, like BS&T, is widely held with no single majority or substantial owner and has been successful in its business and operations, earning an excellent reputation and significant financial strength. 7

8 BOARD RECOMMENDATION If BS&T is to be acquired, the Board considers Neal and Massy to be the better choice as a corporate owner of BS&T in consideration of the interest of the Company and its wider stakeholders. With regard however to the personal interest of shareholders who intend to dispose of their shares, the Board has the following recommendations AT THIS TIME. Recommendation with respect to the Cash Offer of BD$8.50 While the cash price offered of BD$8.50 is in the opinion of the Board favourable to shareholders as compared to the existing offer of $8.00 from Ansa McAl, the Board recommends that shareholders do NOT accept the offer AT THIS STAGE. The reasons for this are due to the circumstances under which this Circular has been issued as noted above, and for those reasons outlined further below. Recommendation with respect to the Combination Consideration The Board is unable to make a recommendation with respect to the Combination Consideration for the reasons outlined below which primarily relate to the variable valuation implications arising from not all of the shareholders taking up this option. That said, if 100% or the overwhelming majority of the shareholders were to take up the Combination Consideration, then the Board would be comfortable in concluding that the offer is most favourable as it believes that the intrinsic value of the combined companies with the benefits to be realised through the creation of strong regional business units (in Retail & Distribution and otherwise) but without the high debt being incurred for a cash only acquisition, would exceed the current cash offer. REASONS FOR RECOMMENDATION TO HOLD BACK ON ACCEPTANCE OF THE OFFER AT THIS TIME The Board, assisted by its financial, corporate and legal advisors, has carefully considered the Neal & Massy offer and the circumstances under which this circular is issued. Following are the primary reasons why the Board has concluded that shareholders should hold back on accepting the Neal & Massy Offer at this stage, albeit that the Cash Consideration may be comparatively favourable: i) Value - With respect to the Cash Offer, the Board is of the view that there is rarely an absolute and single value for a Company as the perception of value will always vary from buyer to buyer depending on the strategic and synergistic value of the Company to the specific bidder. There are varying levels of premium that might be paid for control (and conversely discounts for a minority stake) and for synergistic and strategic reasons. Therefore, it is the Board s view that the BD$8.50 cash price may not necessarily be the highest price that shareholders might ultimately be offered via the current bidding process. While this process may not result in the best outcome for the business and for other stakeholders, it is in this situation that shareholders desirous of selling their shares generally receive the highest price available for passing control of the Company to a successful bidder. ii) Timing - In the section entitled Circumstances under which this Circular is issued we have outlined the expiry timing of the two competitive bids. Given that AMCL has extended the period of its offer, and that the Neal & Massy offer expires after the end of the AMCL offer, shareholders may wish to wait to assess 8

9 how the bidding develops. The recommendation of the Board to shareholders desirous of disposing of their shares not to accept the offer now, but to wait to see how the bid process progresses, is primarily as a result of this timing issue. iii) The Combination Consideration - The reason the Board is unable to make a recommendation as to the acceptance of the Combination Consideration is that the value of this offer is dependant on several factors which are uncertain and these factors include the following: - - Should Neal & Massy be the successful bidder, it may not ultimately achieve a 100% take-up, and while some shareholders may choose the Combination Consideration, many others may select the Cash Offer. In this scenario, Neal & Massy would benefit from the benefits to be achieved from the combined businesses to the extent of the percentage of BS&T shares acquired, but it will have also increased its debt to meet the Cash Offer obligation. The Board is however not aware of the amount or terms of the debt that may be assumed to fund the purchase. Hence the initial combined value of the two companies would likely be different to what it would have been in the case of a pure merger; Those BS&T shareholders interested in acquiring Neal & Massy shares may consider accepting the Cash Offer and then purchasing those shares on the Stock Exchange in either Barbados or Trinidad & Tobago due to the seemingly advantageous price at which they might be obtained. Shareholders should however take into account that as demand for the shares increases, the share price could increase beyond the point at which it may have been better to have opted for the Combination Consideration beforehand. If shareholders wish to consider the Combination Consideration then your Directors recommend that unless you are comfortable in evaluating the above factors in relation to your individual circumstances, that you seek professional financial advice. COURSE OF ACTION THAT THE BOARD INTENDS TO TAKE The Board will be monitoring the bidding process closely and plans to update its recommendation as outlined in this Circular as events unfold, and respond as may be required to any future bids or variations that may be received. 9

10 YOUR RIGHT TO WITHDRAW DEPOSITED SHARES It is your legal right to withdraw deposited shares to the Neal & Massy (or any other) offer. We are advised that the Take-over Bid regulations in Barbados provide that A SHAREHOLDER MAY WITHDRAW HIS SHARES FROM A TAKE-OVER BID AT ANYTIME UP TO 2 BUSINESS DAYS PRIOR TO THE CLOSE OF THE OFFER. We are however advised that the Take-over Bid regulations in Trinidad & Tobago permit shareholders to withdraw tendered shares at any time before the expiration of the offer. There may also be various circumstances which could extend the date by which tendered shares may be withdrawn including for instance where the shares have not been taken up by the Offeror. The Neal & Massy offer document on page 12 under section 4 and in its Notice of Variation under Section 5, states that subject to applicable law, any Shares deposited may be withdrawn at any time before Shares have been taken up by the Offeror. Shareholders are advised where possible, to withdraw their shares up to 2 business days prior to the close of the offer and if they intend to withdraw their shares after that time that they seek legal advice in respect of their own circumstances. Any BS&T shares tendered to NEAL & MASSY may be withdrawn by lodging a Notice of Withdrawal with the same Designated Broker where the applicable shares were deposited. The Designated Brokers are: BNB Finance & Trust Corporation, Independence Square, Bridgetown, Barbados Tel (246) Fax (246) and Republic Securities Limited, 1 st Floor Briar Place, 10 Sweet Briar Road, Port-of-Spain, Trinidad Tel (868) Fax (868) BS&T shareholders who hold or deal their BS&T shares through a brokerage firm and who choose to withdraw their shares should contact their broker in order to withdraw the BS&T shares on their behalf. BS&T shareholders who acted for themselves in tendering their shares under the Neal & Massy offer may use the NOTICE OF WITHDRAWAL OF SHARES FORM included in this document to withdraw those BS&T shares, keeping a careful note of the date and time when the form was faxed or lodged with BNB Finance & Trust Corporation or Republic Securities Limited as the case may be. BS&T shareholders requiring assistance in withdrawing BS&T shares from the Neal & Massy offer or the AMCL offer may contact the BS&T Corporate Secretary at (246) or (246)

11 NOTICE OF WITHDRAWAL OF SHARES OF THE BARBADOS SHIPPING & TRADING COMPANY LIMITED TO: BNB Finance & Trust Corporation By Mail or By Hand: Independence Square, Bridgetown, Barbados By Fax: (246) OR TO: Republic Securities Limited By Mail or By Hand: 1 st Floor Briar Place, 10 Sweet Briar Road, Port-of-Spain, Trinidad By Fax: (868) Take notice that the undersigned is withdrawing * ordinary shares in the capital of Barbados Shipping & Trading Company Limited ( BS&T ) previously deposited pursuant to the NEAL & MASSY HOLDINGS LIMITED Offer to Purchase the shares dated August 28 th, If the undersigned s shares were tendered pursuant to the procedures for book-entry transfer, the depositary account from which the shares were transferred must be credited forthwith with the withdrawn shares. * If the number of common shares is not stated, all shares tendered by the undersigned must be deemed to be withdrawn. ( Date) (Shareholder s signature) (Shareholder s name) Day time telephone number of shareholder or authorised representative 11

12 OTHER INFORMATION Directors and Officers shareholdings The following table details the number of ordinary shares, and outstanding options vested as at the 11 September 2007, beneficially owned by the Directors and Officers of the Company or over which they exercise control or direction: Name of Director No. of Ordinary Shares owned as at 11 Sept 07 % of Issued Shares of the Company No. of other Ordinary Shares which are controlled or directed % of Issued Shares of the Company No. of Vested Options as at 11 Sept 07 Altman, Paul Bernard 105, % 231, % 334 Blackman, Dave Anthony 167, % Nil 1,000 Corbin, Philip Franklin Delano 70, % Nil 12,500 Delmas, Frere Francis Charles 172, % Nil 1,000 Fields, Sir Allan Clifford 151, % Nil 11,555 King, Gerald Anthony Allan 73, % Nil 36,112 Osborne, Sandra Kathleen 60, % 30, % 334 Symmonds, Peter Gladwyn 5, % Nil 9,666 Taylor, Ralph Wendell 5, % Nil Nil Name of Officer No. of Ordinary Shares owned as at 11 Sept 07 % of Issued Shares of the Company No. of other Ordinary Shares which are controlled or directed % of Issued Shares of the Company No. of Vested Options as at 11 Sept 07 Chatrani, Sunil 33, % Nil 668 Corbin, L. Mark 136, % Nil 668 Browne, Everton 19, % Nil 334 Brace, Natalie M. Nil Nil Nil D Aguiar, Frances 1,575 < 0.01% Nil Nil An application is currently pending for the exercise of a number of vested Options, included in the above table, for certain Directors as follows: Philip Corbin 3,500; Sir Allan Fields 11,555; G. Anthony King 9,426 and Peter Symmonds 9,666. An application is currently pending for the exercise of 8,000 of vested Options for executives other than the above Directors and Officers of the Company. Sir Allan Clifford Fields, Gerald Anthony King and Everton Browne together with three other persons are members of the Board of Trustees of the Defined Benefit Pension Plan which owns 2,634,768 shares in the Company. Other than as disclosed above, no associates of the Directors or Officers of the Company own, control or direct any shares in the Company. 12

13 Issue of Shares to and Vesting of Options by Directors and Officers in preceding Two Year Period The following tables detail the shares issued to directors and officers as well as Options not yet exercised but which became vested during the two year period preceding the 7 September Name of Director No. of Ordinary Shares issued during the two year period preceding 11 September 07 Price BD$ No. of Options existing for Ordinary Shares which vested during the two year period preceding 11 September 07 Option Price BD$ Altman, Paul Bernard 1,000 3,000 5,000 4,000 2, Blackman, Dave Anthony 12,000 12,000 18,000 1,102 1,588 18,000 12, Corbin, Philip Franklin Delano 2,000 12,000 12,000 1, , Delmas, Frere Francis Charles 2,000 9,000 1,102 1,588 5,000 18,000 12, Fields, Sir Allan Clifford 1,102 5,555 22,222 38,889 50,000 5, , King, Gerald Anthony Allan 1,102 1,588 5,000 16, ,723 1,389 13

14 Name of Director No. of Ordinary Shares issued during the two year period preceding 11 September 07 Price BD$ No. of Options existing for Ordinary Shares which vested during the two year period preceding 11 September 07 Option Price BD$ Osborne, Sandra Kathleen 12,000 4,000 2, Symmonds, Peter Gladwyn 3, ,833 4,167 2, Name of Officer No. of Ordinary Shares issued during the two year period preceding 11 September 07 Chatrani, Sunil 1,102 1,588 12,000 8,000 4,000 Corbin, L. Mark 1,000 5,000 1,102 1,588 12,000 8,000 4,000 Browne, Everton 1,102 1,588 4,000 Price BD$ No. of Options existing for Ordinary Shares which vested during the two year period preceding 11 September 07 Brace, Natalie M. Nil Nil D Aguiar, Frances Option Price BD$ 334 Nil Shareholders owning more than 10% of the shares The following details the number of ordinary shares, and percentage of the total shares of the Company, beneficially owned or controlled or directed by shareholders which are known by the Directors to represent more than 10% of the shares of the Company: Neal & Massy Holdings Limited 17,381, % Sagicor Financial Corporation 8,631, % 14

15 Interests in the Offeror 1. No Directors or Officers or their associates have, within the six months preceding the date of the offer or otherwise, traded in any shares in Neal & Massy, the Offeror company. Neither do any of them own, control or direct any shares in Neal & Massy, the Offeror company, other than Sir Allan Fields who holds 2,000 shares in Neal & Massy, G. Anthony King who holds 50,000 shares in Neal & Massy and Paul Altman who holds indirectly through Alleyne, Aguilar & Altman 10,000 shares in Neal & Massy. The Directors are not aware of any shares in the Offeror company which are owned, controlled or directed by shareholders that beneficially own more than 10% of BS&T. 2. The following shares in the Offeror company, Neal & Massy, are owned or controlled by shareholders owning, controlling or directing more than 10% of the shareholding in BS&T: Sagicor Financial Corporation 2,092, % 3. BS&T has not, within the six months preceding the date of the offer traded in any shares in the Offeror company. BS&T beneficially owns 3,500,000 shares in the Offeror company. BS&T does not control or direct any other shares in the Offeror company. 4. There are no persons acting jointly or in concert with the Company in respect of this offer. Trading in BS&T shares To the knowledge of the Directors: 1. No Directors or Officers of the Company or their associates have traded any shares in BS&T in the 6 months preceding the date of the offer. 2. Trading in BS&T shares by Shareholders owning, controlling or directing more than 10% of the shareholding in BS&T within the 6 months preceding the date of the offer are as follows: Name Transaction Amount of Ordinary Shares Date (On or about) Price BD$ Sagicor Global Balanced Fund Purchased 1, Mar 07 $5.20 Sagicor Global Balanced Fund Purchased 2, Apr 07 $5.15 Sagicor Equity Fund Sold 57, May 07 $5.29 Neal & Massy Purchased Aug 07 $ BS&T did not purchase any of its own ordinary shares in the 6 months preceding the date of the offer. No acceptance of offer 1. No Director or Officer of the Company or their associates has accepted or intends to accept the offer as at the date of this Circular. 2. The Directors are not aware of any shareholder, owning or exercising control over 10% or more of the shares of BS&T, having accepted or intending to accept the offer. 15

16 Material Contracts 1. No Director or Officer of the Company or their associates has any interest in any material contract to which the Offeror is party. 2. The Directors are not aware of any shareholder, owning or exercising control or direction over 10% or more of the shares of BS&T, having entered into any material contract to which the Offeror is party. Directors and Officers contracts Other than contracts of employment, no Directors or Officers of the Company or its affiliates have any service contracts with the Company. Contracts with Offeror No Directors or Officers have entered into any contracts, agreements, commitments, understandings or arrangements made or proposed to be made with the Offeror. Contracts between shareholders and the Offeror The Directors are unaware of any contracts, agreements or understanding made or proposed to be made between the Offeror and any shareholder of the Company. Prior 6 months trading The Directors have reviewed the trading and price range of the Company s shares over the last 6 months as disclosed in the Neal & Massy offer document, and are of the view that such information is adequately disclosed except that we are advised that during the month of April 2007 the Low Price of the BS&T shares on the Trinidad & Tobago Stock Exchange was recorded as TT$16.63 and not TT$ Financial information The Company has not prepared any financial information for public filing since the issuance of its third quarter results for the period ended June 30, 2007, which were filed on July 31st, A copy of this latest filing is attached to this document in Appendix 1. The Directors and Officers of the Company are not aware of any material events subsequent to the issue of the latest filing that would materially change the financial information therein or its presentation. Further the Directors and Officers of the Company are of the view that there has been no material change in the prospects of the Company since the date of the filing. Intent to purchase shares in the Company No Director or Officer of the Company intends to purchase shares in the Company other than the exercise of vested options during the course of the offer. It is noted in the Neal & Massy offer document in Section 5.13 that it intends to acquire shares of BS&T on the stock market. The Directors are aware of public statements made in the press by Island Properties Limited, and/or related parties, who have expressed an intent to purchase shares of the Company; the Directors have however not received any offers from such persons. 16

17 Other material facts On 3 August 2007, the Company and Neal & Massy Holdings Limited signed agreements to terminate the proposed merger of the two companies. Advisors The Company s advisors, listed below, have given and have not withdrawn their consent to their names appearing in this circular in the form and context in which it appears. Financial Advisors KPMG Corporate Finance Ltd. KPMG 5th Floor Montague Sterling Centre Hastings East Bay Street, Nassau Christ Church The Bahamas Barbados KPMG Corporate Finance was appointed as an independent financial advisor by the Company after receipt of the formal offer from AMCL Holdings and has been retained in respect of the offer by Neal & Massy. Their primary scope has been to review our financial information and to provide feedback and independent input to the Directors in this regard. KPMG Corporate Finance expresses no formal opinion in respect of this circular or its contents by virtue of their name being included herein, and has not audited any of the information herein. Corporate Consultants Attorneys-at-Law Grenville Phillips & Associates Inc Mr. P. K. H. Cheltenham Q.C. Suite 5, James Fort Building Charlton Chambers, Hincks Street, Whitepark Road P.O.Box 618, Bridgetown Bridgetown Barbados Barbados Directors of BS&T The following are the current Directors of the Company at the date of issuance of this Circular: Senator Sir Allan C. Fields - Chairman, G.A.A. King - Chief Executive Officer, P.B. Altman, D.A. Blackman, P.F.D. Corbin, F.F.C. Delmas, S.K. Osborne, P.G. Symmonds, R.W. Taylor A former Director, C.D. Maingot, an executive of the Neal & Massy Group, resigned from the Board of BS&T on 26 July 2007 and has had no further participation in any matters before the Board of Directors. A former Director, B. Dulal-Whiteway, the CEO of Neal & Massy Holdings Limited, resigned from the Board of BS&T on 26 July 2007 and has had no further participation in any matters before the Board of Directors. Corporate Secretary Natalie M. Brace Directors Certificate THIS DIRECTORS CIRCULAR AND ITS CONTENTS WERE APPROVED BY THE BOARD OF DIRECTORS ON SEPTEMBER 11 th, 2007 AND THE DELIVERY OF THIS CIRCULAR HAS BEEN AUTHORISED BY THE BOARD OF DIRECTORS. THE FOREGOING CONTAINS NO UNTRUE STATEMENT OF MATERIAL FACT AND DOES NOT OMIT TO STATE A MATERIAL FACT THAT IS REQUIRED TO BE STATED OR THAT IS NECESSARY TO MAKE A STATEMENT NOT MISLEADING IN THE LIGHT OF THE CIRCUMSTANCES IN WHICH IT WAS MADE. Sir Allan Fields Chairman G. Anthony King Managing Director 17

18 APPENDIX 1 Page 1 0f 3 THE BARBADOS SHIPPING & TRADING COMPANY LIMITED Unaudited Consolidated Balance Sheet As At June 30, 2007 (Expressed in thousands of Barbados dollars) Restated Unaudited Unaudited Audited As At As At As At 30/06/07 30/06/06 30/09/06 CURRENT ASSETS Cash and Short-term Deposits ,055 26,107 Short-term Investments 93,181 88, ,603 Accounts Receivable 175, , ,907 Prepayments 18,543 19,722 15,430 Inventories 90,548 84,578 96, , , ,084 CURRENT LIABILITIES Accounts Payable & Accruals 118, , ,857 Unearned Premiums & Outstanding Claims 112, , , , , ,879 WORKING CAPITAL 147, , ,205 Investments in Associated Companies 160, , ,594 Long-term investments 96,607 65,838 87,129 Property, Plant & Equipment 291, , ,961 Other Assets 24,105 25,002 25,338 Long-term Loans (130,143) (144,869) (144,118) NET ASSETS EMPLOYED 590, , ,109 FINANCED BY Share Capital 97,904 96,764 96,933 Reserves 450, , ,099 SHAREHOLDERS EQUITY 548, , ,032 Minority Interests 42,114 39,152 43, , , ,109 18

19 APPENDIX 1 Page 2 0f 3 THE BARBADOS SHIPPING & TRADING COMPANY LIMITED Unaudited Consolidated Statement of Income For the nine months ended June 30, 2007 (Expressed in thousands of Barbados dollars) Restated Change on Unaudited Unaudited Audited Prior Nine Nine Months To Nine Months To Year To Months 30/06/07 30/06/06 30/09/06 Revenue 7.3% 595, , ,882 Operating Profit before interest expense 21.6% 41,939 34,493 46,988 Interest expense 24.0% (11,042) (8,902) (12,346) Profit before tax - Parent and Subsidiaries 20.7% 30,897 25,591 34,642 Share of Income after tax of Associated Companies 50.9% 8,016 5,313 5,993 Consolidated Group Profit before tax 25.9% 38,913 30,904 40,635 Taxation (6,072) (3,557) (4,682) Profit after taxation 20.1% 32,841 27,347 35,953 Attributable to Minority Interest (3,190) (2,767) (2,720) Attributable to Shareholders 20.6% 29,651 24,580 33,233 Basic earnings per share Note: Results for the prior nine months have been restated for fair comparison and in accordance with IAS 39 (Revised) so as to exclude any unrealised gains or losses in the parent company s Available-for-Sale Investment holdings, and also IAS 28 whereby depreciation on buildings is recognised for those Associates which do not charge such depreciation under their accounting policies. 19

20 APPENDIX 1 Page 3 0f 3 THE BARBADOS SHIPPING & TRADING COMPANY LIMITED Unaudited Consolidated Statement of Cash Flows For the nine months ended June 30, 2007 (Expressed in thousands of Barbados dollars) Restated Unaudited Unaudited Audited Nine Months Nine Months Year To To To 30/06/07 30/06/06 30/09/06 Operating Activities Profit before taxation (excluding Associated Companies) 30,897 25,591 34,642 Adjustment for items not involving the movement of funds 12,571 13,287 16,861 Working capital changes (22,947) (19,272) (32,367) Net cash from operating activities 20,521 19,606 19,136 Net cash used in investing activities (10,523) (7,734) (16,795) Net cash used in financing activities (35,267) (28,516) (26,933) Decrease in cash and cash equivalents (25,269) (16,644) (24,592) Chief Financial Officer s Report To the Shareholders of The Barbados Shipping & Trading Co. Ltd: In my professional opinion, the unaudited consolidated financial statements present fairly, in all material respects, the financial position of the company as of June 30, 2007 and the results of the operations and its cash flows for the nine months then ended in accordance with International Financial Reporting Standards. Sunil Chatrani, CGA, FCA, MBA Chief Financial Officer September 11,