Businessman Patrick Bitature has released a detailed statement about the $34m loan saga that is threatening his Simba Group empire’s existence.
While Bitature’s lawyer Fred Muwema has appeared on several media platforms stating that his client has no debt with anyone, because the initial $10m was taken from a company that has no jurisdiction in Uganda and gone ahead to refer to Vantage the South African company as a “ghost”, Bitature acknowledges the loan in his statement.
Last week, stories had started making rounds that tycoon Sudhir Ruparelia had an invisible hand behind Bitature’s woes, with Daily Monitor reporting that Bitature borrowed the money to clear an earlier loan from Sudhir’s Crane Bank. Bitature does not mention Sudhir anywhere in his statement, and clearly states that the purpose of the loan was to “fund projects within Simba Group.”
“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,” he says.
Bitature appears to have secured a good loan deal as he admits the agreement had a three year-grace period, and the 2014 loan was only due in 2017, but he failed to pay and it was restructured to 2019.
Without saying exactly as it is, Bitature puts his woes on poor speculation of the country’s economic environment.
“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 … 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.”
Bitature also blames “great business challenges” occasioned by the Covid-19 pandemic. However, his lenders Vantage are on record indicating that Bitature has shown unwillingness to settle his debt even before the pandemic hit.
While Vantage says Bitature ran to court to delay or avoid payment of their loan when it was due in 2019, Bitature in his statement says it was about “extraordinary acceleration of the interest rate, which in real terms is over 35% per annum in USD” and other issues.
“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,” he says.
Bitature also highlights the issues that brought the hitherto private proceedings into the public eye.
“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,” he says.
“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,” Bitature says.
Last week Bitature lost a court battle where he had sought a temporary injunction from the Commercial Court against Vantage and its agencies, from commencing any private prosecution or legal action until final disposal of a pending contempt of court case. The ruling meant that Bitature can now be privately sued by Vantage Mezzanine Fund II partnership in a bid to recover the loan it extended to the businessman in 2014.
Public sentiment is that, perhaps this is why Bitature now says “he is committed to having this business dispute resolved at the earliest opportunity.”