Simba Group Chairman, Patrick Bitature
Vantage Capital Fund Managers Proprietary Limited has said the behavior of Simba Group and its Chairman Patrick Bitature in borrowing money from international lenders and failing to meet repayment and contractual obligations does not reflect well on Uganda’s international image as an investment destination, “nor does the ease at which the Simba Group has been able to abuse the legal system and its institutions to frustrate its lawful creditors.”
In a statement issued last night, the Lender revealed that on December 11, 2014, Vantage concluded a Mezzanine Term Facility Agreement (Loan Agreement) with SPIC (Simba Properties Investment Company Limited), represented by Bitature (guarantor and promoter).
Pursuant to the Loan Agreement, Vantage says that SPIC received a loan of US$10,000,000 from Vantage’s second mezzanine fund (structured as a limited partnership in South Africa, the most common structure for private equity and private credit funds).
Three other Simba group companies: Linda Properties Limited, Elgon Terrace Limited, and Simba Telecom Limited (the Simba Companies) also signed the Loan agreement and guaranteed the loan and provided securities for the loan.
Instead of making efforts to repay the Loan, the lender says that the Simba Group and Bitature resorted to litigation, claiming that Vantage’s Loan was invalid and signed under duress and therefore Simba, having used the money, did not have to repay it.
“Unfortunately, such tactics have been employed by Bitature before, both against Vantage and against other Simba Group lenders, including a South African bank. All of the above took place well before the rise of the Covid-19 pandemic,” Vantage Capital says.
Recently, the URSB blocked Vantage’s attempt to exercise its security rights over Simba Group’s shares.
“Vantage approached the High Court of Uganda to compel the URSB to give effect to its legitimate share charges. The court dismissed Vantage’s application based on a technicality, that the Vantage Partnership in question was not registered in Uganda and therefore lacked the standing to sue or be sued in Uganda. The court did however find that if Vantage was registered, it would have ruled in favour of Vantage against the URSB. The court made no findings as to the validity of the underlying legal agreements,” Vantage Capital’s statement reads in part.
Technicalities aside, Bitature’s lender says that the underlying Loan and Security agreements remain valid.
“To date, the Simba Group and Bitature have not paid a single cent of their indebtedness under the Loan. The result of not servicing any interest, compounding over 7 years, is that the indebtedness has ballooned to over US$34,000,000,” Vantage Capital notes and that it “will not be deterred by the Simba Group’s and Mr Bitature’s continued abuse of court processes and public institutions, nor by their recent “PR Campaign”, in their ongoing efforts to avoid their creditors and lawful obligations.”
The Lender warns thus: “Vantage will persist in the recovery of its long- overdue Loan, exercising its rights against the Security if need be.”
However, Vantage Capital notes that it remains hopeful that justice will prevail.
“We remain faithful and confident that justice will ultimately prevail,” Vantage Capital says.
Bitature Speaks Out
Bitature yesterday said the last few days have been very tough for “me personally and for our group as a whole as we made news for all the wrong reasons.”
“No doubt as a businessman and one always looking for new pathways, I knew that one day these kinds of headlines would cast a cloud over decades of hard work. As you all know today, we live in a world of 24 hour news cycle full of opinions, suspicion and innuendos. For that I make no judgement and hold no grudge,” he said.
“Legal and commercial issues have arisen in our financing and these are being addressed and when the moment is right, I will speak to them. No doubt these are tough challenges I am responsible for and are challenges I will face and resolve. Social media is not the place to resolve these issues,” he added.
He, however, reassured all “our staff on the frontline of service to our customers, all our suppliers and you our customers that we are open for business and ready to serve you as we have done for the last 25 years.”
“As one of our proverbs says No matter how long this dark night may be, a bright morning will come. Be assured of my resolve to continue making our contribution to the transformation of our country,” Bitature said.