Vantage Capital vows to wrestle Patrick Bitature

South African money lenders Vantage Capital have issued a public statement regarding their loan dispute with Mr Patrick Bitature, the owner and founder of Simba Group.

Below is the full statement:

In December 2014 Vantage Capital made an investment in Uganda that has recently become the centre of media misinformation and disinformation. We find it pertinent to set the record straight.

Vantage Capital is an Africa-focused fund manager with offices in Johannesburg, South Africa. Vantage was founded in 2001 and has to date raised funds of over US$1.4 billion. Vantage’s Mezzanine Division has made 33 investments into 11 African countries, making it the largest and most experienced independent mezzanine funder on the continent.

Investors in Vantage’s Mezzanine Fund include major international investors of repute, including several European development finance institutions, African pension funds as well as development banks. The Mezzanine Fund’s manager is a licensed and registered financial services provider, regulated by South Africa’s regulator.

Summary of Events:

Simba Properties Investment Company Limited (SPIC) (as borrower) and Mr Patrick Bitature (as guarantor and promotor) borrowed US$10,000,000 (Loan)from Vantage to refinance a portion of the Simba Group’s existing debt and to fund the completion of Simba’s Skyz Hotel. Mr Bitature and the Simba Group granted security for the Loan in the form of charges over their shares and legal mortgages were registered over certain properties owned by them (Security).

The Loan matured and fell due for repayment in December 2019. Instead of making efforts to repay the Loan, the Simba Group and Mr 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 Mr 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.

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 standingto 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.

Technicalities aside, the underlying Loan and Security agreements remain valid. To date, the Simba Group and Mr 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 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. Vantage will persist in the recovery of its long-overdue Loan, exercising its rights against the Security if need be.

We note that the behaviour of the Simba Group and Mr. Bitature in borrowing money from international lenders and then denying its 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. However, we remain faithful and confident that justice will ultimately prevail.