Samuel Mukasa, Uganda’s most prominent and wealthy poultry business mogul, is set to lose his multi-million dollar company properties over a bank loan.
Mukasa has been running Biyinzika Enterprises Ltd for the last 31 years.
The company, which runs hatcheries and sells chicks across East Africa, previously controlled about 65% of Uganda’s poultry market share before the COVID-19 pandemic.
The outbreak of the pandemic saw the company lose most of its market, suppliers and employers.
Details of the bank loan remain unclear.
However, the lenders’ lawyers Tumusiime, Kabega & Co. Advocates have since advertised Biinzika’s properties, saying they will be auctioned by October 12, 2023.
“Duly instructed by our client, the registered mortgage, a financial institution, we do hereby give notice of intention to sell the land and developments described below to realise monies due to the mortgagee, unless the debtor (Biyinzika) shall pay the monies due on the mortgage together with the associated fees and costs of recovery before the date of sale (30 days after the advent.”
The advertised properties include Dina Apartments in Ntinda, Kampala; 41 acres of land in Kasambya with hatcheries with capacity of 460,000 birds per week; and 100 acres of land in Bulemeezi.
In 2014, a venture capital fund known as 8 Miles provided equity to Biyinzika for the poultry business to expand. The company was renamed Biyinzika International.
At the time, the company wanted to sharpen its focus on new products for regional markets.
8 Miles eventually took over the management of the business, compelling Mukasa to open Biyinzika Enterprises which is now struggling with loans.
COVID-19 impact
Due to the economic impact of the COVID-19 pandemic, many indigenous Ugandan companies and businesses are on the verge of losing, or have already lost, tangible assets which they used as collateral for securing bank financing.
These companies are now reportedly seeking for bailouts from the government to stabilise their financing structure.
A myriad of factors including inter alia, high commercial bank interest rates, Government’s failure to pay suppliers, political instability in key regional export markets like South Sudan, and the weakening economy have been suggested as causes of the companies’ poor performance.
Biyinizika’s family members have since been quoted by the media asking for a government bailout as they were employing thousands of employees and bringing in foreign exchange from export of poultry to the region.
Some of the companies which the government has bailed out recently include Atiak Sugar and Roko Construction Company among others.
Experts say government bailouts should only be limited to a few companies that contribute significantly to the national treasury by paying taxes and employ a high number of people.
However, even these should be thoroughly audited to ascertain the causes of business failure and the subsequent ability of repayment of the bailout funds by the recipient company.
Research has since shown that firms recovered more fully from nongovernmental bailouts.
