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NT1- Net1 Receives Final Decision From SASSA
Net 1 UEPS Technologies, Inc.
Registered in the state of Florida, USA
(IRS Employer Identification No. 98-0171860)
Nasdaq share code: UEPS
JSE share code: NT1
ISIN: US64107N2062
("Net1" or "the company")
Net1 receives final decision from SASSA
Johannesburg, South Africa, November 4, 2008 - Net 1 UEPS Technologies, Inc.
(NASDAQ: UEPS; JSE: NT1) ("Net1" or the "Company") today announced that it has
received the final decision in respect of the Payment Service Tender from the
Chief Executive Officer ("CEO") of the South African Social Security Agency
("SASSA"). Bidders have been advised that the CEO has decided to:
- make no award of tenders submitted in response to SASSA Tender
19/06/BS and to terminate the procurement process; and
- defer a decision about commencing a fresh tender process for the
provision of a social assistance grants payment service.
The reasons for the decision of the CEO are summarized as follows:
1 a number of the bid evaluation technical criteria specified in the
Request for Proposal ("RFP") are vaguely formulated and resulted in a
high degree of subjectivity in the decision making process and
inconsistent scoring of bids;
2 uncertainty and ambiguity of the RFP regarding payment solutions
based on multiple payment channels resulted in an unfair and
uncompetitive bidding process;
3 the important objectives of the procurement process relating to
submission of performance guarantees by bidders could not be
achieved;
4 due to the lack of clarity in the RFP regarding the measurement of
preference points, an important objective of the RFP, namely the
advancement of broad-based black economic empowerment, could not be
achieved;
5 evaluating and adjudicating the payment service tender,
notwithstanding the serious flaws identified in the RFP and bid
evaluation process, would be inconsistent with the application of a
fair, transparent, equitable, cost-effective and competitive
procurement system and would expose the SASSA to a significant degree
of legal risk;
6 a decision by SASSA on whether or not to commence a fresh tender
process will require further consultation and consideration of
various important factors, including the terms, evaluation criteria
and specifications for a new tender, the envisaged payment solution
and conditions for the acceptability and evaluation of bids which may
be based on alternative payment models.
"Due to the protracted process that SASSA undertook, this outcome is not in any
way surprising" said Dr. Serge Belamant, Chairman and CEO of Net1. "We will
continue with our high-quality service offering to SASSA and focus on developing
our international market opportunities. The outcome of the SASSA tender process
clarifies our operating margin expectation for the duration of our current
contracts, which may well be extended," he concluded.
About Net1 (www.net1ueps.com)
Net1 provides its universal electronic payment system ("UEPS"), as an
alternative payment system for the unbanked and under-banked populations of
developing economies. The company believes that it is the first company
worldwide to implement a system that can enable the estimated four billion
people who generally have limited or no access to a bank account to enter
affordably into electronic transactions with each other, government agencies,
employers, merchants and other financial service providers. To accomplish this,
Net1 has developed and deployed the UEPS. This system uses secure smart cards
that operate in real-time but offline, unlike traditional payment systems
offered by major banking institutions that require immediate access through a
communications network to a centralized computer. This offline capability means
that users of Net1`s system can enter into transactions at any time with other
cardholders in even the most remote areas so long as a portable offline smart
card reader is available. In addition to payments and purchases, Net1`s system
can be used for banking, health care management, international money transfers,
voting and identification.
Net1 also focuses on the development and provision of secure transaction
technology, solutions and services. Its core competencies around secure online
transaction processing, cryptography and integrated circuit card (chip/smart
card) technologies are principally applied to electronic commerce transactions
in the telecommunications, banking, retail, petroleum and utilities market
sectors. These technologies form the cornerstones of the "trusted transactions"
environment of Prism, a South African based subsidiary of the company, and
provide the Company with the building blocks for developing secure end-to-end
payment solutions.
Net1 recently acquired 80.1% of BGS Smartcard System AG ("BGS"), an Austrian
company, whose core business consists of developing and integrating smart card-
based offline and online financial transaction systems. Since 1993, BGS has
implemented tailor-made smart card-based payment solutions, focusing on emerging
economies and in cooperation with banks, enterprises and government authorities.
BGS is headquartered in Vienna, Austria, and has subsidiaries in India and
Russia, and a branch office in the Ukraine. Distributors are located in Asia,
Central and South America, the Commonwealth of Independent States and the Middle
East.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and
unknown risks and uncertainties. A discussion of various factors that could
cause the Company`s actual results, levels of activity, performance or
achievements to differ materially from those expressed in such forward-looking
statements are included in the Company`s filings with the Securities and
Exchange Commission including the risk factor entitled "The South African Social
Security Agency, or SASSA, is in the process of conducting a national tender for
the distribution of welfare grants in which bidders had the opportunity to bid
for all of South Africa or on a province-by-province basis. If we were not to
receive contracts to continue to distribute these grants in each of the
provinces where we currently distribute them, or if we do win these contracts,
but the terms are not as favorable to us as our current contracts, our financial
condition, results of operations and cash flows would be materially and
adversely affected," contained in our Annual Report on Form 10-K for the year
ended June 30, 2008. The Company undertakes no obligation to revise any of these
statements to reflect future circumstances or the occurrence of unanticipated
events.
Contact William Espley at Net1 Investor Relations at:
Telephone: 1-604-484-8750
Toll Free: 1-866-412-NET1 (6381)
Johannesburg
4 November, 2008
Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 04/11/2008 09:00:03 Supplied by www.sharenet.co.za
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