Simbamanyo Estates Limited has lost another property, Afrique Suites Hotel over a $10.8 million loan acquired from Equity Bank.
Recently, the Estate lost Simbamanyo House located on plot 2 Lumumba Avenue after it failed to service the loan. The building had been mortgaged by its owners with Equity Bank but after failing to pay, the exercise was conducted through public bidding on October 8 by Equity Bank Limited.
According to documents seen by Eagle Online, the hotel was sold the same day as Simbamanyo House was sold.
According to court documents filed in the Commercial Division of the High Court, on August 20, 2012, Equity Bank Kenya and Equity Bank Uganda entered into a loan agreement in which the two banks agreed to advance Simbamanyo with $6m.
The loans, which would make up a consolidate sum of $8.10m (Shs29.83b) including interest and operational fees, among others, sought to finance the construction of Afrique Suites Hotel in Mutungo, Luzira north east of Kampala and facilitate the takeover of a prior facility advanced to Simbamanyo by Shelter Afrique.
The two banks, details indicate, pooled money together with at least $3.5m drawn from Equity Bank Kenya and $2.5m from Equity Bank Uganda. However, Simbamanyo Estates challenged the outstanding sum, saying it is only aware of $7.19m (Shs26.48b).
In its defense, Equity indicates that Sambamanyo benefited and was aware of every financial transaction that was advanced to it. Equity also argued that Bank One, based in Mauritius, was drafted into the transaction on the request of Simbamanyo, which had sought to obtain bridge financing of up to $10m.
On Friday last week, Simbamanyo Estates Limited withdrew their application in which they were seeking to stop the takeover of its property on Lumumba Avenue. They had petitioned the Court of Appeal seeking orders to maintain the status quo stopping the sale of their property by Equity Bank which is seeking to recover loans worth $10.8 million (Shs40 billion).
On Friday the Estate’s lawyer Robert Friday Kagoro asked the Court to allow withdrawal of the matter saying that it has been overtaken by Events.