Businessman, Patrick Bitature, the CEO and Founder of the Simba Group of Companies, has spoken out about the ongoing commercial dispute between some of the Group Companies and a South African mezzanine financier, saying the issues are being addressed appropriately and that the mentioned companies remain open for business.
This is the first direct statement by the billionaire businessman, since a public-auction advert appeared in one of the dailies, purporting to put properties belonging to some Simba Group subsidiaries up for sale, upon instructions by a one, Kirunda & Wasige Advocates. Apparently, the law firm was acting on behalf of the Vantage Mezzanine Fund II Partnership, a South African financier.
The Simba Group companies in question are Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited, and Elgon Terrace Hotel Limited.
Simba Group is an East African conglomerate with business interests in telecom, energy, property, agriculture, mining and other industries.
Simba Group has since dismissed the public auction advert as a “malicious illegality”, an “abuse of the court process” as well as a “misguided and unprofessional conduct” by the bailiffs/auctioneers and the lawyers for whom they purport to represent.
In the 21st May 2022, statement, the businessman does not deny obtaining the financing, but says, that a dispute has arisen and is being resolved.
“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,” he says, adding: “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.”
“I make this statement today, to first and foremost reassure 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,” reiterates the businessman in the statement.
An optimistic Bitature 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.”
Brief background to the commercial dispute
Ruparelia Group Wins Key Entebbe Land Case, Clearing Path for the New Mega Speke Resort and Convention Centre, EntebbeThe brief facts of the case are that Simba Properties Investment Co. Limited obtained a term facility of USD10 million from and entered into a Mezzanine Term Facility Agreement (MTFA) with Vantage Mezzanine Fund II Partnership run by South Africa’s Vantage Capital Fund Managers (Pty) Ltd.
Mezzanine financing is a hybrid of debt and equity financing that gives the lender the right to convert the debt to an equity interest in the company in case of default.
Thereafter, a commercial dispute ensued, over the contractual terms of the agreement prompting Simba Properties Investment Co. Limited to go to Court, under Civil Suit No. 988 of 2019.
Vantage Mezzanine Fund II Partnership in Miscellaneous Application No. 201 of 2020, successfully convinced the court to dismiss the main suit, since the contract warranted that all disputes should undergo arbitration first. However, upon dismissal of the main suit, Vantage Mezzanine Fund II Partnership didn’t go for the arbitration process but instead sought to exercise the debt-to-equity conversion options and therefore sought to execute a shares transfer of Simba Properties Investment Co. Limited, Simba Telecom Limited, Linda Properties Limited, and Elgon Terrace Hotel Limited.
Upon lodging transfer documents with Uganda Registration Services Bureau (URSB). Simba Properties Investment Co. Limited objected and following a hearing of both parties, URSB declined the transfer and instead advised the parties to continue to arbitration as advised by the court.
Dissatisfied, by URSB’s decision, Vantage Mezzanine Fund II Partnership again went to Court, via Miscellaneous Cause No. 205 of 2021 seeking a judicial review of URSB’s decision. Court, in a May 9th, 2022, ruling, subsequently found that the Vantage Mezzanine Fund II Partnership was not locally registered and therefore was a non-existing party and proceeded to dismiss all claims by it. But the court also heard from URSB that the documents that Vantage Mezzanine Fund II Partnership presented for registration were defective on various levels and therefore could not be legally registered.
It appears, following the two rulings that were not in Vantage Mezzanine Fund II Partnership’s favour, the company decided to try another move, this time, to directly sell and or takeover properties belonging to the Simba Group companies that the court said, Vantage Mezzanine Fund II Partnership, cannot own.
It is this latest move that Simba Properties Investment Co. Ltd, is protesting and has said, it shall challenge in court.
