By HOMELAND MEDIA TEAM
Ugandan Businessman Patrick Bitature has released a detailed statement acknowledging a credit facility he acquired from Vantage Capital in 2014, a South African money lending institution.
Over the last two weeks, Bitature has been a subject of public debate for refusing to pay back $10 million to Vantage, a loan that has since accumulated to $34 million with compound interest.
But instead the business chose to use Uganda’s legal gymnastics to frustrate the lender, an action that the business community sternly condemned.
However, Bitature on Monday issued a detailed statement admitting the transaction.
Greetings from Simba Group,
The last few days have been quite challenging on me, family, colleagues, business partners, staff, and other Simba Group stakeholders.
Ugandan media has recently been awash news reports about members of the Simba Group. These attacks against Simba Group are an affront to our economic prospects as they inhibit the capacity of local entrepreneurs to exploit local and international opportunities.
Whilst I may be mindful of the fact that certain aspects of this matter are still pending in the courts and/or dispute resolution avenues. I have after careful reflection, elected to share this statement with you.
The statement is issued without prejudice and I will attempt to outline the facts of the matter at hand and trace the genesis of our engagement and apparent disagreement with one of my business partners.
This note also serves as a reassurance to all our business partners, affiliates, and stakeholders that I remain committed to bring the issues at hand to a close justly, fairly and as expeditiously as possible.
As part of our business expansion plans, Simba approached Vantage Capital in 2014, seeking an alternative to the more common and mainstream pure debt funding for business expansion.
Consequently, a ‘Mezzanine Term Facility Agreement” (MTFA) was signed between Vantage Mezzanine Fund II Partnership (“Vantage”) and Simba Properties Investment Company (Simba) for $10,000,000 to fund projects within the Group.
These projects included the completion of Protea by Marriott Skyz Hotel and working capital for our ElectroMaxx Power subsidiary.
The agreement had a 3-year moratorium (freeze) for repayment of both the principal and interest.
Simba was confident of the economic prospects in the Country as Uganda had discovered 6.5 million barrels of oil reserves.
Like many other business players in Uganda, we were expecting an economic upturn, and therefore in line with our innovative plans, ground breaking and forward vision we explored opportunities to generate value in the economy through sustainable investments.
As one of the leading Ugandan business Group with a credible track record, we were well-positioned to harness this financing opportunity in order to grow and create more jobs and value for the nation.
Following the signing of the Mezzanine facility in 2014, the first repayment was due in 2017.
However, unforeseen challenges such as the unprecedented delay of the Final Investment Decision (FID) on the oil and gas projects and Vantage’s requirement to us to improve the Hotel’s fire and safety features to internationally benchmarked standards hindered our envisaged projects.
We then proactively engaged Vantage and mutually agreed to a further moratorium for two (2) years, thereby mutually agreeing to freeze all payments until December 2019.
In December 2019, Vantage issued a demand for the principal and interest from 2014 onwards and by early 2020, the said amount had increased. With the effects of COVID-19 on the business and the economy, we were once again faced with great business challenges.
Vantage, nevertheless, attempted to realise their security over the prime assets of Simba. This was despite my overtures to resolve the issue of the extraordinary acceleration of the interest rate which in real terms is over 35% per annum in USD.
The intervention of Court was then sought with a bid to secure a determination on several issues. The Court referred the Parties to arbitration at a seat of Vantages choosing in accordance with the terms of the MTFA.
Vantage chose London as the seat of the Arbitration and filed a Request to Arbitrate at the International Chamber of Commerce (ICC). Simba duly acknowledged and responded to the Request to Arbitrate and continues to participate in this process to date.
However, notwithstanding the reference to arbitration, Vantage attempted to transfer shares in Simba which they held simply as security.
Uganda Registration Service Bureau (URSB) a government body declined to register the transfer of shares and directed Vantage to follow the direction of Court to essentially resolve the issues at arbitration first.
Vantage being displeased with that decision sought judicial review in the High Court seeking mandamus orders to direct URSB to transfer the shares, a matter which court on the 9th of May 2022 dismissed on the grounds that they, Vantage, had violated mandatory provisions of the law under the Partnership Act and the Business Names Registration Act, thereby in effect lacking legal presence to sue or be sued.
Despite this ruling, Vantage went on to advertise the Group properties on the 18th of May 2022 in total disregard to the foundation and concerns raised by Court in its decision,
This inevitably sparked off the mayhem that broke out all over social media and other news outlets.
It is worth noting that on the 16th day of May, 2022 only two days before the advert, the same Vantage had lodged a Notice of Appeal against the decision of the Court. It therefore surprised us that they could not await the results of their own appeal.
As a business, we are committed to having this business dispute resolved at the earliest opportunity. I would like to emphasize that this is a dispute between two business parties.
May I take this opportunity to reassure our clients and stakeholders and the general public that we will continue to operate our businesses and unreservedly serve the nation as we have done for the last 30 (thirty) years.