Struggling tycoon Bitature in legal battle with Absa Bank over unpaid UGX50b loan

Patrick Bitature is a Ugandan businessman, entrepreneur and author (PHOTO/Courtesy)

Patrick Bitature is a Ugandan businessman, entrepreneur and author (PHOTO/Courtesy)

Patrick Bitature’s legal battles are not about to end after the Ugandan businessman was again dragged to the Commercial Division of the High Court over an unpaid loan amounting to UGX 50 billion.

Fresh from his three-year dispute with South African venture capital firm Vantage Capital over a $10 million loan, Bitature is now accused by Absa Bank in a civil suit of failing to honour a consent judgment signed between the parties to pay the money.

The facts of the case, which was filed in September, are that in May 2018, Absa gave $8 million (about Shs30.5b) to Bitature’s company, Electro-Maxx, and an another $10 million (about Shs38b) for a mini oil refinery in August of the same year. Bitature guaranteed both loans.

When the companies failed to repay, Absa issued a demand notice in March 2020, leading to a lawsuit by Electro-Maxx challenging the loan facilities. A consent judgment in May 2020 acknowledged a debt of $15,891,168, establishing repayment schedules.

Under the agreement, Electro-Maxx was to pay $75,000 per month from July 2020 to July 2021. Thereafter, the company was to pay $550,000 per month until April 2024, with a final payment of $342,343 in May 2024.
While the company paid the monthly $75,000 instalment and reduced the loan amount to $14.9m, they failed to meet the instalments that were meant to kick off in August 2021.

Court documents indicate that Electro-Maxx defaulted and applied for another restructuring of the loan.
Under the new structure, the company would pay $120,000 per month for each of the 10 months from October 2022 to July 2023, another $999,256 per month from August 2023 to July 2023 and a final payment of $998,145 on August 31, 2024.

However, on July 12, 2023, three years after signing the consent judgment, and after paying 13 out of an expected 46 repayment installments under it, Electro-Maxx went to the High Court to challenge the consent judgment.
In court filings, Electro-Maxx indicated that it was in a legal dispute with Uganda Electricity Generation Company Limited for not fulfilling its end of the bargain in a power purchase agreement that would have provided the private firm with liquid.

The government recently entered into a five-year deal to buy power from Electro-Maxx to offset the money owed to the company.

However, Justice Stephen Mubiru ruled against Bitature, emphasizing the applicant’s failure to prove the judgment’s voidability for various reasons.

The businessman has also been in a long running legal dispute with Vantage, a South African financier
In August, a London based arbitrator ordered Mr Butature, his wife and their respective companies to pay Shs34 trillion to the South African lender Vantage Mezzanine Fund.

The London arbitration followed several lawsuits in Uganda in which lawyers acting for Mr Bitature sought unsuccessfully to nullify the loans on the basis that the South African company did not have a physical presence registration in Uganda as a lender, and was not regulated.

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