Patrick Baguma Bitature, one of Uganda’s key local investors, needs our fervent prayers. A ten million United States dollar ($10m) debt he took from the mezzanine capital providers based in South Africa is threatening to wipe out his entire business empire.
The tragedy is that the debt is now a little shy of hitting a whopping thirty million ($30m). It is doubtable Patrick has this kind of money at hand at the moment given the big battering the Covid19 scourge has wrought on businesses globally.
The bigger tragedy than the ones before is that the lenders are hounding this man all the same. They demand that he either pays up or surrenders his business empire to auction. Tough times such as this Patrick is going through would call for divine intervention, really.
He went borrowing on December 11, 2014. He borrowed the money from the Vantage Mezzanine Fund based in South Africa through Simba Properties Investment Limited and Simba Telecom. He holds the majority of shares in the two companies. He took the debt aiming to expand his real estate portfolio.
While inking the deal, the then jolly Patrick termed it a game changer. He popped champagne prematurely, going by the scary turn of events.
The dollars borrowed from the land of Mandela, is fast proving to have been a curse. Matter of fact, the debt rather than boosting Patrick’s real estate business, is instead threatening to collapse the man’s entire business empire boasting of oil and gas, power generation, telecoms as well as swanky hotels.
The owners of the money have since come knocking at Patrick’s door. They did not come to pay him a courtesy call. They dropped by to collect a whopping 26,486,633.47 dollars from the man who wears two hats of the board chairman of UMEME as well as that of the president of the Uganda Private Sector.
This figure is almost three times more than the ten million borrowed. And this is the domino effect of the borrower’s failure to return the money to where he borrowed it from in time.
By the way, the figure we are quoting here is just money which was purportedly due and owing by December 11, 2019 when the lenders asked Patrick to pay up. The passage of time could have pushed the debt higher than what it was in December of 2019.
“The recovery of the huge sums (if allowed to proceed) would break the back of my business empire in an instant,” the borrower himself confirms the monstrous challenge he faces currently, according to sources.
But, much as Patrick has been ignoring the funders on the excuse that the whole transaction was illegal and extortionate, he does not deny taking the dime in the first place.
While he plays ping pong, the liability itself has obviously been growing bigger and bigger as we have endeavored to demonstrate here above than what he was obligated to pay in 2019. In a sum, Patrick is drowning deeper and deeper into debt.
Well, the local investor has been hanging on an interim order issued by the commercial court in the December of 2019. The order bars the lenders from selling the securities pledged by the purported defaulter.
The Court order was purposed to give the borrower an opportunity to air out his grievances as far as the foreclosure of the securities is concerned.
Bad news is that the lenders, in a bid to recover their dollars without any more delay, returned to the commercial court recently to have the order vacated.
The lenders argue how Bitature is merely using this Court order to delay repaying what is due to them yet he does not deny picking the dollars let alone spending it.
Maybe the lenders have a reason to smell foul play. What was meant to be an interim order is short of clocking two years now. What is apparent is that neither the complainant nor the Court of law has been vigilant in pursuing justice in this matter.
And since the Court order seems to be favoring one party while undercutting the other, maybe the South Africans being money lenders, are right to throw tantrums given that the seven year delay in getting back their money has been denying them an opportunity to lend it to other borrowers and earn profit off it .
Bitature guaranteed the surrendering of shares in the companies that borrowed the money in case the principal borrowers failed to pay back themselves. He also undertook to surrender shares in sister companies to the ones that were borrowing the dollars in the event of default.
To this end, he issued blank empty transfer forms which he undertook to sign in favor of the nominees of the lenders in the event of default. Some of the sister companies were mentioned as Elgon Terrace Hotel as well as Linda Estates. The other guarantors were Carol Bitature, the wife of Patrick Bitature, Dr Natalie Bitature, Trevor Grant Bitature, Jonathan Patrick Bitature as well as Stephanie Mel Bitature.
The agreements were drawn and filed by the eminent law firm of Masembe, Makubuya, Adriko, Karugaba and Ssekatawa( MMAKS) advocates. MMAKS were acting for the lenders while counsel Asa Mugenyi witnessed the legal documents on behalf of the borrowers. The agreements are dated between December 11, 2014 and December 31, 2014. They were duly registered with the Uganda Registration Services Bureau( read the registrar general of companies).
We wind up with a word of caution. Should Patrick fail in his litigation endeavors, God forbid, he will end up paying an even pretty huge price. We did not intend to be alarmists by making this cautionary remark. We have simply come to know from experience how litigations akin to this one can at times turn out to be counterproductive and hugely costly.