UGANDA, Kampala | Real Muloodi News | President Museveni is reported to have come to the rescue of MOGAS Group owner, tycoon Geoffrey Rugazoora, who is drowning in debt with billions owed to Stanbic Bank.
A letter circulating the media, purportedly written by the president, directs Ministry of Finance to buy Rugazoora’s 15 acres of land in Mukono so that the proceeds can pay off the oil family’s debts.
In 2021, Stanbic Bank put MOGAS Group in receivership to recover a three-year USh43bn loan.
MOGAS Group, a multinational integrated downstream oil marketing company, is said to have defaulted on its loan obligations owing to Covid-19 related disruptions, resulting in a protracted repayment negotiation that started in 2018 and culminated in Stanbic Bank’s current debt recovery process.
MOGAS’ Options to Repay the Loan
MOGAS Group as a number of options for dealing with its debt crisis. The first option involves an impending deal between MOGAS and Ola Energy Ltd.
In January 2022, High Court judge Justice, Jeanne Rwakakooko, granted MOGAS a temporary injunction order of six months restraining Stanbic Bank from selling off MOGAS’ properties, to allow the company to complete its negotiation with Ola Energy Ltd, which was willing to take over MOGAS and pay off the debt.
The second option for MOGAS Group is to allow Stanbic to sell the property assets to recover the monies.
The third option proposed by President Museveni in his apparent September 5 letter to PM Robinnah Nabbanja, is for government agencies to buy 15 acres of prime land in Mukono from Rugazoora at the prevailing market rates.
“There is a Ugandan family, the Rugazooras, that are quite active in businesses, including owning petrol stations in Uganda, Tanzania, Burundi, Congo etc. They have some debts that they could not promptly settle because of the Corona pandemic. However, they have prime land of 15 acres in Mukono near the railway. If the government bought that land, they would get the money to help them reschedule their debts into manageable instalments that they could pay over seven years,” the letter reads in part.
“Let, therefore, the appropriate agency of the government buy that land at the prevailing market price. Should it be the Ministry of Finance, Planning and Economic Development or Works, which one to buy? Involve the attorney general to advise you. Move fast so that the debt does not escalate,” the letter concludes.
Other Rugazoora Properties up for Auction
In addition to MOGAS Group’s assets being on the verge of auction, Geoffrey Rugazoora’s personal real estate assets are also at risk, including his home at Plot 24 Solent Avenue Mbuya, Kampala which is advertised for sale by auctioneers. Another house located at Plot 573 Kyadondo block 160 Rubaga, Kampala has been advertised. Another advertised property is located on Plot 6, Singo Block 553 Bukomero.
Rugazoora was enthusiastic about Uganda’s transnational crude oil pipeline expansions, anticipating the East African Crude Oil Pipeline (EACOP) project would generate increased demand for MOGAS’ products.
However 2020 was a unique and challenging year for the company, mainly due to the unprecedented impact of Covid-19. MOGAS Group is a supplier for some of the sectors of the economy worst hit by the pandemic, including the hospitality and aviation industries. The pandemic containment measures undertaken by regional governments, while necessary, resulted in significantly reduced business activity.
Experts are asking the government to develop action plans to assist Ugandans who have been economically hurt by Covid-19-related disruptions.
About MOGAS Group
Maestro Oil & Gas Solutions (MOGAS) was founded in 1987 to deal in the distribution of finished petroleum products in the region and is also registered in the United Arab Emirates.
MOGAS distributes various petroleum products across East Africa and the Democratic Republic of Congo.
MOGAS Group has at least 12 fuel stations in and around Kampala, with more in Jinja and Entebbe. Other assets include modern oil terminals at Dar es Salaam and Tanga in Tanzania.
Apart from Uganda, MOGAS assets in other East African Community countries are also affected by Stanbic’s recovery actions, with recovery efforts being conducted simultaneously in Uganda, Kenya and Tanzania.
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