Vantage Capital Fund Managers Proprietary Limited

Registration No: 2000/024123/07

VAT No: 4730191584 | FSB Licence No: 28711
Johannesburg | Ground Floor, 3 Melrose Boulevard,
Melrose Arch, 2076 | Tel: +27 (0) 11 530 9100
www.vantagecapital.co.za

PUBLIC STATEMENT ON VANTAGE CAPITAL’S DISPUTE

WITH THE SIMBA COMPANIES AND THEIR PROMOTERS

I
n December 2014 Vantage Capital made an investment For those interested, the below sets out the events 7. Importantly, all of the above occurred well before deliberately) the outcome of Misc. Application 205 of
in Uganda that has recently become the centre of summarised above in greater detail. the existence of the Covid-19 pandemic. The cold 2021. We find it pertinent to clarify as follows:
media misinformation and disinformation. We find it truth is that Simba Group’s (and Mr. Bitature’s) current
pertinent to set the record straight. 1. On 11 December 2014 Vantage concluded a Mezzanine financial woes originated long before the Covid-19 (a) The Court did not determine the long-standing
Term Facility Agreement (Loan Agreement) with SPIC, pandemic, which further damaged the business. Having dispute between the parties. It simply stated that
Vantage Capital is an Africa-focused fund manager with of- represented by Mr. Bitature (who also gave a personal not received a single cent to date in respect of our Loan an unregistered foreign partnership cannot sue or
fices in Johannesburg, South Africa. Vantage was founded guarantee). Pursuant to the Loan Agreement SPIC granted in Dec 2014, we can hardly be criticised for our be sued in Uganda.
in 2001 and has to date raised funds of over US$1.4 received a loan of US$10,000,000 from Vantage’s legal enforcement, which began well before Covid-19.
billion. Vantage’s Mezzanine Division has made 33 invest- second mezzanine fund (structured as a limited (b) The court did not make any finding as to the
ments into 11 African countries, making it the largest and partnership in South Africa, the most common structure 8. In response to HCCS 988 of 2019 we filed Misc. legality of the contracts between the parties,
most experienced independent mezzanine funder on the for private equity and private credit funds). Three other Application 201 of 2020, which resulted in Simba’s neither did it stipulate that the Borrowers in this
continent. Simba group companies: Linda Properties Limited, baseless suit and related interim orders being dismissed instance should not pay their debt. In the absence
Elgon Terrace Limited, and Simba Telecom Limited (the and vacated. In determining that Application in favour of of any such finding, the funding agreements
Investors in Vantage’s Mezzanine Fund include major Simba Companies) also signed the Loan Agreement Vantage, the trial judge stated: remain valid, and the debt remains.
international investors of repute, including several European and guaranteed the loan and provided securities for the
development finance institutions, African pension funds as loan. “I find this claim by the Respondents [SPIC and (c) The Commercial Division of the High Court in
well as development banks. The Mezzanine Fund’s manager Mr Bitature] escapist and unserious. This is more Misc Application 201 of 2020 has already ruled
is a licensed and registered financial services provider, 2. Among other securities, the Simba Companies provided so because this court is in position to take judicial that the High Court of Uganda has no jurisdiction
regulated by South Africa’s regulator. Vantage with charges on shares in the Simba Companies notice of the fact that the persons behind the to determine the validity of the said agreements
as well as legal mortgages on certain properties owned Respondents, particularly the third Plaintiff in the (any such dispute on that issue being subject to
Summary of Events: by both the Simba Companies, Mr. Bitature, and his amended plaint [Mr Bitature], are some of the most an ICC arbitration clause).
wife Carol Bitature. Mr Bitature provided a personal polished and astute business personalities there
Simba Properties Investment Company Limited (SPIC) guarantee. are in Uganda. The Respondents were well and (d) It is patently false to suggest that the court held
(as borrower) and Mr Patrick Bitature (as guarantor and independently advised by senior and prominent that the Vantage Partnership does not exist at all
promotor) borrowed US$10,000,000 (Loan) from Vantage 3. Vantage provided the above funding to SPIC to refinance legal professionals in Uganda. Faced with such or that it is a “ghost” that needs to be exorcised.
to refinance a portion of the Simba Group’s existing debt its existing debt, to fund completion of its Skyz Hotel and facts, my view is that a feeble claim of duress The court made no such determination. The court
and to fund the completion of Simba’s Skyz Hotel. Mr to provide working capital, in line with Vantage’s strategy and/or undue influence of the nature as this one only settled the question on non-registration in
Bitature and the Simba Group granted security for the to support mid-market family-owned businesses that amounts to an insult of own intelligence on the part Uganda.
Loan in the form of charges over their shares and legal are seeking to raise growth capital without having to of the Respondents and their advocates.”
mortgages were registered over certain properties owned dilute their shareholding. At the time the transaction was (e) Throughout all the litigation between the parties,
by them (Security). concluded and publicly announced (December 2014), 9. Mr. Bitature was the third plaintiff to whom the court the Simba Companies have never contested the
Mr. Bitature stated in the press (seemingly pleased with referred in the above statement. The above court finding existence of our partnership or denied having
The Loan matured and fell due for repayment in December the deal struck) that: puts to rest any contentions as to the fairness of the taken the loan from our fund.
2019. Instead of making efforts to repay the Loan, the Simba bargain between the parties.
Group and Mr Bitature resorted to litigation, claiming that “Vantage brings an important and exciting new model 17.In summary, despite recent (and false) claims to the
Vantage’s Loan was invalid and signed under duress and of financing to the East African region. Simba Group 10.All interim orders having been vacated, we were free to contrary, we remain entitled under our Loan Agreement
therefore Simba, having used the money, did not have to is pleased to have found a strong mezzanine financing enforce and recover what is owed. and related documents to the recovery of our long-
repay it. Unfortunately, such tactics have been employed by partner who provides medium-term growth capital overdue debts against SPIC and Mr Bitature. Working
Mr Bitature before, both against Vantage and against other but does not want to take our hard earned equity,” - 11.Following the above decision, we moved to perfect our with our duly instructed lawyers, we will persist with the
Simba Group lenders, including a South African bank. All of Patrick Bitature, the Founder and Chairman of Simba securities over the Simba shares that had been provided enforcement of our rights as we are duty-bound to our
the above took place well before the rise of the Covid-19 Group” as collateral. We met all the conditions for registration investors to do.
pandemic. of the said documents, including the payment of stamp
https://venturesafrica.com/vantage-capital- duty in the sum of Ug. Shs 854,023,850. 18.Notably, despite having borrowed the US$10,000,000
Recently, the URSB blocked Vantage’s attempt to exercise delivers-10m-funding-to-simba-groups- from us more than seven years ago in December
its security rights over Simba Group’s shares. Vantage investment-subsidiary/ 12.The Uganda Registration Services Bureau (URSB), after 2014, to date, neither SPIC nor Mr Bitature have
approached the High Court of Uganda to compel the URSB intervention by SPIC and Mr Bitature, declined to register managed to repay even a single cent of what is owed.
to give effect to its legitimate share charges. The court https://www.africaoutlookmag.com/industry- the said documents. An ordinary man in Mr Bitature’s position would no
dismissed Vantage’s application based on a technicality, insights/article/627-vantages-fund-ii-commits-10- doubt be embarrassed, perhaps ashamed, by this fact.
that the Vantage Partnership in question was not registered million-to-simba-properties-uganda 13.We took exception to URSB’s unlawful decision and But Mr Bitature appears to be unburdened by such
in Uganda and therefore lacked the standing to sue or be commenced Misc. Application 205 of 2021 to compel the sentiments.
sued in Uganda. The court did however find that if Vantage 4. In December 2017 the Simba Group defaulted under the URSB to effect the share transfers. This Application was
was registered, it would have ruled in favour of Vantage Loan Agreement, having taken out significant 3rd party determined on 9th May 2022. The Trial Judge dismissed 19.We remain faithful and confident in the Ugandan judiciary
against the URSB. The court made no findings as to the debt without Vantage’s consent, and having failed to this Application on the grounds that: and that justice will ultimately prevail. However, we note
validity of the underlying legal agreements. service interest under the Loan (which was supposed to that the circumstances of our relationship with the Simba
be serviced quarterly). SPIC and Mr Bitature launched (a) Based on the evidence he had before him, he was Group and Mr. Bitature does not augur well for Uganda’s
Technicalities aside, the underlying Loan and Security legal action (Misc. Cause 12 of 2017) and obtained not satisfied that the Vantage Partnership, from international image as an investment destination.
agreements remain valid. To date, the Simba Group and Mr interim injunctions against Vantage to avoid/delay the which the borrowers had received the loan, exists
Bitature have not paid a single cent of their indebtedness consequences of that default. in South Africa; 20.Investors world over are concerned that borrowers who
under the Loan. The result of not servicing any interest, enter serious business undertakings can so easily abuse
compounding over 7 years, is that the indebtedness has 5. Instead of pulling the rug out from Mr Bitature and the (b) Since the Vantage Partnership was not registered state institutions in a country with the kind of stable and
ballooned to over US$34,000,000. Simba Group by proceeding to enforce, we engaged in Uganda, it did not have the capacity to sue or be able leadership that Uganda has, to avoid their creditors
with them to restructure the loan and agree a plan for sued in Uganda. and debt obligations ad nauseum. We trust that sooner
Vantage will not be deterred by the Simba Group’s and the Group to find its feet, improve performance and rather than later, the concerned authorities will address
Mr Bitature’s continued abuse of court processes and eventually settle our loan in December 2019. Agreement 14.The Trial judge also held, however, that had he found this issue and arrest a looming crisis of confidence in
public institutions, nor by their recent “PR Campaign”, in was reached, and SPIC and Mr Bitature abandoned their that the Vantage Partnership had locus (legal capacity) Uganda’s credentials as an investment destination.
their ongoing efforts to avoid their creditors and lawful legal action. to sue or be sued in Uganda, he would have issued writs
obligations. Vantage will persist in the recovery of its long- of Certiorari quashing URSB’s decision, and Mandamus, 21.We derive no pleasure from publishing this statement
overdue Loan, exercising its rights against the Security if 6. In December 2019 we experienced Déjà vu – as the Loan compelling URSB to register the said documents - in and do not believe it to be proper behaviour to air out
need be. fell due SPIC and Mr Bitature (once again) resorted to effect, confirming that the actions of the URSB in one’s private disputes or business affairs in the press.
court action to avoid their debts and prevent/delay declining to register the share transfers were unlawful. We in fact deliberately refrained from such “PR tactics”.
We note that the behaviour of the Simba Group and Mr. Vantage from exercising its rights. We are now aware (as In response to the recent media attention and Mr
Bitature in borrowing money from international lenders are some other creditors of the Simba group) that this is 15.While we reserve the right to challenge the decision Bitature’s “PR Campaign” however, we are duty bound
and then denying its obligations does not reflect well on the Simba Group’s, and Mr Bitature’s, preferred modus through appropriate forums, we note the current position to set the record straight.
Uganda’s international image as an investment destination, operandi. And so, SPIC and Mr Bitature commenced of the court and we are working with our lawyers to take
nor does the ease at which the Simba Group has been able HCCS 988 of 2019 at the Commercial Court in Uganda, the necessary and appropriate actions in this regard. 22.We trust that this places the recent controversy in
to abuse the legal system and its institutions to frustrate its claiming that the Loan was illegal, or in the alternative, proper focus and provides the full context. We remain
lawful creditors. However, we remain faithful and confident had been signed under undue influence. They once again 16.We note, however, that several statements and committed to engaging with all concerned stakeholders
that justice will ultimately prevail. obtained Interim Orders temporarily restraining Vantage publications have been issued to the public following to ensure that this matter is resolved without further
from further actions. the 9 May 2022 judgment that misrepresent (we believe unnecessary histrionics.

FOR: VANTAGE MEZZANINE FUND II PROPRIETARY LIMITED, ultimate general partner of the VANTAGE MEZZANINE FUND II PARTNERSHIP
and
VANTAGE CAPITAL FUND MANAGERS PROPRIETARY LIMITED