Business

Judge Slams Lawyers Over NSSF’s Stake In Uganda Clays

NSSF Acting Managing Director Geraldine Ssali Busuulwa (L) at a recent function in Kampala

Kabale District Council Speaker, what is ed http://ccrail.com/wp-content/plugins/jetpack/sync/class.jetpack-sync-defaults.php Pastoli Twinomuhangi has accused conservationists at Echuya Forest Reserve located in Kabale and Kisoro districts of failing to do their work.

Speaking during a council session, and http://coparmex.org.mx/wp-content/plugins/jetpack/modules/tiled-gallery.php Twinomuhangi said that the forest reserve had been encroached on and tilled from both sides by locals.

The Forest Reserve is managed by the National Forestry Authority (NFA) and a Non-Government Organization, viagra 40mg http://chistes-cortos.info/wp-content/plugins/tdo-mini-forms/admin/tdomf-edit-post-panel.php Nature Uganda which works with local communities most of them being the Batwa that live at the edges of the forest.

Twinomuhangi blamed the National Forestry Authority for always siding with locals who encroach on the forest.

NFA’s Milton Katwesigye regarded the Speaker’s accusations as misinformed, saying that NFA has made every effort possible to protect the forest reserve, including planting new trees.

Nature Uganda Echuya Forest Conservation Project Manager, Henry Mutabazi, also told this website that the organization was using a more modern approach of conserving Echuya by involving local communities by supporting them in income generating projects like fruit orchards and apiaries among others as a way of preventing them from-over relying on the forest.
Kabale District Council Speaker, this http://cloudninerealtime.com/wp-admin/includes/options.php Pastoli Twinomuhangi has accused conservationists at Echuya Forest Reserve located in Kabale and Kisoro districts of failing to do their work.

Speaking during a council session, web http://cnet-training.com/wp-content/plugins/contact-form-7/modules/special-mail-tags.php Twinomuhangi said that the forest reserve had been encroached on and tilled from both sides by locals.

The Forest Reserve is managed by the National Forestry Authority (NFA) and a Non-Government Organization, http://dangerdame.com/wp-content/plugins/woocommerce/includes/class-wc-autoloader.php Nature Uganda which works with local communities most of them being the Batwa that live at the edges of the forest.

Twinomuhangi blamed the National Forestry Authority for always siding with locals who encroach on the forest.

NFA’s Milton Katwesigye regarded the Speaker’s accusations as misinformed, saying that NFA has made every effort possible to protect the forest reserve, including planting new trees.

Nature Uganda Echuya Forest Conservation Project Manager, Henry Mutabazi, also told this website that the organization was using a more modern approach of conserving Echuya by involving local communities by supporting them in income generating projects like fruit orchards and apiaries among others as a way of preventing them from-over relying on the forest.
The saga between National Social Security Fund (NSSF) and Uganda Clays Limited’s shareholder Habib Sembatya has gone to another lever after Judge Lydia Mugambe adjourned the case to December 12 2014, page http://contemporarydancevideos.com/wp-includes/class-pop3.php where she will deliver her final ruling.

This follows an application to the High Court by Sembatya, thumb a minority shareholder of UCL, restraining the Fund’s decision to covert its Shs16.7 billion loan to Uganda Clays into equity and or acquiring a super-majority shareholding of 66 percent.

“I don’t see how NSSF would lend money to Uganda Clays without interest, pay NSSF and if you don’t have money, you then need to explain the options you have for NSSF,” said Mugambe during the Court hearing on Tuesday.

“You are failing to win me over. Should NSSF sit back and wait for Uganda Clays to collapse? You should have been more prepared with your sections,” Mugambe told Najib Mujuzi Advocates, Sembatya’s lawyers.

The Judge also declined their request to submit a written explanation to support their call for NSSF to retire the Shs11.05bn for 20 years to allow Uganda Clays to stabilize in business from a loss making company to a profit making entity.

She argued that she gave the lawyers three hours to give their explanation but they failed to convince her and she couldn’t grant them more time.

UCL Financial Crisis, What Went Wrong?

In the year 2010, Uganda Clays Limited obtained a shareholder loan of Shs 11.05 billion from the NSSF at an interest rate of 15 percent per annum.

The loan was utilized to retire a bridge loan from commercial banks and accumulated arrears, purchase spares for the factory at Kajjansi including a used factory line from Isarawe brick factory in Tanzania, a clay filter and to enhance the kiln at the Kamonkoli factory.

On October 31, 2014, the loan and accrued interest [the NSSF loan] was Shs 19.06 billion.  The monthly instalment of loan and interest for repayment is Shs 390,000,000. In addition to the above loan, the UCL also has other loans from East African Development Bank  of Shs 1.22 billion; Standard Chartered Bank  (Shs 1.87 billion). The monthly repayment instalments for the above two loans are Shs88M for EADB and Shs85m for StanChart Bank.  The combined monthly loan repayment obligations of the UCL amount to Shs 563,000,000. The company’s monthly revenue from the sale of its clay products is approximately Shs 1.8 billion and monthly expenditure is Shs 2.3 billion.

According to the documents filed in Court, NSSF suggests that Sembatya, the Applicant who is a shareholder of UCL will have the opportunity at the extraordinary general meeting to present his position and arguments for or against the proposed transaction before the general body of the other shareholders.

The documents also revealed that no existing shareholder will lose any shares due to the proposed loan-to-equity transaction.  “The averment by Sembatya that his shares will be diluted and squeezed out of the Company are therefore clearly baseless and completely false,” reads in part.

UCL Managing Director, George Inholo in his affidavit to the High Court  argued that the repayment of the NSSF loan and interest is therefore a substantial burden on the Company’s cash flow position and the management and Board of Directors of the 1st Respondent (UCL) have for some time been considering options for reducing the above indebtedness including selling shares and converting the existing shareholder loan into equity.

He goes on to argue that blocking the loan-to-equity transaction will have “disastrous consequences” to the Uganda Clays and ultimately the general body of shareholders because the current share price of the company on the Uganda Securities Exchange is bound to shrink.

Already, there have been signs of it falling below the current shs20 per share. One September 10, 2014, the share price dipped to shs18 compared to the listing price of shs4, 000 fourteen years ago. This means that the shareholders of the company have already incurred significant losses and UCL’s imminent collapse will be the last nail in their coffin if NSSF doesn’t chose to increase its shareholding in the debt ridden company. The collapse would also affect wipe out savings of over 1.4 million NSSF members whose money was sunk by the Fund in the company when it was a star performer on the stock market.

According to investment analysts at the stock market, if NSSF is allowed to convert its debt into equity, the deal will greatly reduce the debt budget of the Kajjansi based firm and will cut back the pressure on its cash flow hence boosting its financial health

Comments

Header advertisement
To Top