In an effort to assist Ugandan tycoon Patrick Bitature in offsetting a $35-million debt he owes to the South African-based Vantage Mezzanine Fund II, the Ugandan Cabinet of Ministers has reportedly given approval to a deal for the government to acquire a thermal plant owned by Electromaxx, a company controlled by the tycoon, for the sum of UGX 240.9 billion ($66 million).
According to a report by The Investigator, the cabinet met on Monday and unanimously agreed to acquire the Electromaxx Thermal Plant owned by Bitature, for UGX 240.9 billion ($66 million). It is rumored that this move was influenced by Bitature’s close associate, State Minister for Privatization and Investment, Hon. Evelyne Anite.
Electromaxx is the first indigenous privately-owned power generating company in Uganda. It operates a thermal power plant with an installed capacity of 90 MW in Tororo, close to the Kenyan border. The power generated is sold to the national grid under a Power Purchase Agreement.
Should this agreement gain parliamentary approval, it could be a financial lifeline for Bitature, potentially offsetting his looming monetary concerns. While the deal is packaged in a manner to suggest that the government is looking to secure Bitature’s Electromaxx Thermal Plant as an auxiliary to its existing grid, it is believed that the underlying reason for the deal is to provide liquidity to Bitature to enable him take care of his financial obligations to the South African fund.
However, the decision to acquire the plant seemingly sidesteps Auditor General (AG) John Muwanga’s recommendations. Muwanga has in the recent past, highlighted concerns over Electromaxx’s escalating debts, ongoing legal conflicts, and land disputes that might impede the smooth transfer of the plant’s assets. Despite these red flags, the government appears inclined to back Bitature.
Bitature’s financial strain, largely attributed to the unrecovered $35 million from M/s Vantage Mezzanine Fund II Partnership, intensified following unsuccessful legal appeals in Ugandan courts. An arbitration court in London further exacerbated matters, ruling against Bitature. Billionaires.Africa reported in December that Bitature was seeking a government bail out through the sale of his power plant.
Bitature’s financial troubles trace back to his endeavors to liquidate his debts, primarily through the sale of the Electromaxx Thermal Power Plant. However, Vantage Capital’s rising demands, which surged from an initial $10 million to an outstanding $35 million, coupled with the adverse court verdicts, have further strained his financial stability.
While Bitature’s prospects seem to be improving, courtesy of his influential ties with Minister Anite, the broader implications of this deal remain under scrutiny. As developments continue to unfold, lingering questions remain regarding the underlying terms of this transaction and Electromaxx’s commitment to delivering on its obligations. Further insights into the agreement’s specifics are eagerly anticipated.
