Johannesburg – The Public Investment Corporation (PIC) is scrambling to recoup the more than R1-billion it lent Allied Mobile Africa in 2015, with the matter likely to be resolved in court.
The two entities announced six years ago they had signed a strategic finance and partnership for a debt funding facility of $55-million (about R800-million at the time).
The deal was structured in a senior loan facility agreement (SLA) and the mezzanine loan facility agreement (MLA), both worth $27.5-million.
The money has since accrued interest, taking the total amount Allied owes to the PIC to R1.1-billion. The facilities were meant to drive the company’s growth in South Africa, as well as its expansion on the rest of the African continent.
However, in letters drafted by PIC management and seen by Sunday World, Africa’s largest asset manager is frustrated as Allied failed to pay back the money belonging to government employees.
The PIC began as early as 2018 in trying to have Allied pay up. In a letter dated 16 February 2018, penned by the PIC’s executive head: private equity and Sips, Mervin Muller, the asset manager demands that Allied fulfill its commitments.
“The borrower [Allied] is in default as provided for in terms of clause 21.2 of the term loan agreement, in that the borrower failed to make payment to the lender of the commitment amount due and payable on November 30 2017,” Muller wrote in a letter directed to Allied Group CEO Jacqueline Courtney.
This letter seems to have been ignored by Courtney, as Muller followed up with another letter on December 18 2018, which also reminds Allied it is in default of the contract signed in 2015. PIC acting chief investment officer Sholto Dolamo in November 2020 drafted a certificate of balance that shows Allied owed the entity R587-million plus R61.9-million in interest in the SLA and R627-million plus interest of R70-million in the MLA.
Sunday World has also seen a letter from PIC’s attorneys, Madhlopa & Thenga, requesting Allied to make good on its commitments. “Due to the event of default, the amount of R1 176 945 609.42 (R1.1 billion), being the South African rand equivalent of $55 000 000, has become due and payable to our client,” the letter reads.
The PIC, which manages Government Employee Pension Fund assets, has now sought refuge with the Joburg High Court in trying to recoup its money.
Allied is headquartered in Nassau, the capital of the tax haven of the Bahamas. Allied was established in 2003 as a cellular product distributor and third-party logistics provider to the mobile telecommunications industry in Africa.
The telecoms company has a presence in Mozambique, Namibia, Zambia, Uganda, Rwanda, the DRC, Angola, Zimbabwe, Lesotho, Swaziland, Botswana and Kenya. Worryingly, it seems the PIC will face an uphill battle torecoup its money as one of Allied’s companies – Allied Mobile Communications (Pty) Ltd – is in liquidation. Questions sent to Courtney on her company e-mail address went unanswered, as an automated system-generated reply said: “Please note, this company is in liquidation.”
It’s the second time the PIC has burned its fingers in the telecoms industry.
In March, it emerged that Pan-African telecommunications group Smile Telecoms was facing liquidation after the PIC, which is a minority shareholder and creditor, pulled its funding and would not sign an agreement that would see a further $51-million injected into the company.
PIC spokesperson Sekgoela Sekgoela did not respond to questions, despite acknowledging receipt.
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