Businessman Patrick Bitature, the CEO and Founder of the Simba Group of Companies has rubbished malicious reports that city tycoon Sudhir Ruparelia is after his property.
Bitature has of late been in commercial dispute with a South African equity firm Vantage Capital.
Through his official Twitter handle, he dismissed all the claims that have been making rounds on social media that Sudhir could be behind Vantage’s attempt to take over Bitature’s empire.
“I would like to assure all of you that I do not think anybody in Uganda and in particular my long-time friend Sudhir Ruperalia is after my property. Unfortunately, this is part of a deliberate smear campaign aimed at eroding both his and my reputation in the eyes of the public,” Bitature tweeted.
Brief background to the commercial dispute
The 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.
Commenting on the saga 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.”
Bitature statement
My truth, for God and Country
Greetings from Simba Group,
2025: Finance Trust Bank posts 32% growth in deposits; 74% surge in net profit in strongest performance yetThe 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.
The Genesis
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 inthe 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.
Negotiation
Following the signing of the Mezzanine facility in2014, the first repayment was due in 2017. However, unforeseen challenges such as the unprecedented
“As a business, we are committed to having this business dispute resolved at the earliest opportunity.”
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 Vantage’s 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.
Assurance
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.
For God and my Country
Patrick Bitature
Chairman, The Simba Group
