Stanbic bank places Mogas group under receivership

Stanbic Bank Uganda has placed oil marketing company Mogas Group under receivership in order to recover outstanding loans.

Receivership is a remedy available to secured creditor to recover amounts outstanding under a secured loan in the event that the company defaults on the loan.

It is therefore used as a debt collecting tool.

According to the bank, the move has been mooted in order to recover outstanding debts accrued by the oil marketing company.

“Stanbic Bank Uganda Limited has placed Mogas Group assets under receivership to recover outstanding loans. Kabiito Karamagi with the law firm, Ligomarc Advocates has been appointed receiver in Uganda and is leading the takeover process of the borrower’s assets in the country,” the company said in a statement.

In a letter to the Inspector General of Police, dated September, 28, 2021, the bank notified him of an intended enforcement of security against a defaulter.

“This is to formally notify you that Stanbic Bank Uganda Limited through its lawyers of H and G Advocates and Ligomarc Advocates intends to commence and enforcement process in respect to one of its biggest non-performing customers,” the letter reads in part.

The bank says as part of the receivership process the property of Mogas in various parts of the country will be taken over by the receivers appointed by the bank.

“It is intended that the process will be carried out peacefully in an orderly manner without disruption to neighbours,” the bank says as it requests for assistance from Police while carrying out the process.

In another letter dated October, 14, 2021, Ligomarc Advocates has written to the police chief informing him of the appointment of lawyer Kabiito Karamagi as the receiver of the company.

The law firm in the letter informed police that the take over of Mogas assets will happen in Kampala, Jinja, Entebbe and Busega.

Debt

According to Stanbic, Mogas has been a client of Standard bank group and is multi-borrowed across several jurisdictions including Uganda and the asset takeover was being applied as a last resort.

“The asset takeover is being applied as a last resort after all possible options have been explored over the last three years but regrettably failed to yield positive results,” the bank says.

Mogas, multinational integrated downstream oil marketing company is said to have defaulted on its loan obligations resulting in a protracted repayment negotiation that started in 2018 and has culminated in the current recovery process.

Founded in 1987 Maestro Oil & Gas Solutions (MOGAS) is an integrated regional downstream oil marketing company with business operations ranging from international oil trading to marine and inland terminals, retail networks, and lubrication services.

The company has strongly positioned itself as the leading brand name for fuels, oil and lubricants in East and Central Africa with operations in Uganda, Kenya, Tanzania, Rwanda, Burundi, the Democratic Republic of Congo and the UAE.

In Uganda, Mogas’ core operating assets include modern inland fuel depots with a capacity of 5,000 m3 in Kampala among others whereas the company is the sole distributor for Castrol in Uganda and Rwanda.