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NT1 - Net 1 UEPS Technologies, Inc. - Net1 Concludes Black Economic
Empowerment ("BEE") Deal
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 Concludes Black Economic Empowerment ("BEE") Deal
Johannesburg, South Africa, January 26, 2012 - Net 1 UEPS Technologies, Inc.
("Net1" or the "Company") (NASDAQ: UEPS, JSE: NT1) today announced that it
has concluded a Broad Based Black Economic Empowerment transaction, to
strengthen the development of its business plan, and in compliance with
South African regulation and business practice. The Company`s actions in
support of achieving a stronger Black Economic Empowerment standing are
consistent with similar initiatives pursued by other leading South African
companies across multiple industries.
Pursuant to the transaction, Net1 has agreed to issue to a consortium of
black South Africans, community groups and the Net 1 Foundation (the "BBBEE
consortium") a one-year option to purchase up to 8,955,000 shares of the
Company`s common stock, equal to 19.9% of the Company`s current issued and
outstanding shares, with an exercise price of US$8.96 per share. Issuance of
the option is subject to the fulfillment of certain conditions, including
obtaining the relevant regulatory approvals.
The lead partner in the BBBEE consortium is Mosomo Investment Holdings (Pty)
Ltd ("Mosomo"), a well-known black empowerment investment company with a
proven track record in transformation, and with experience in mining,
financial services and mass banking concepts. Its most notable recent
investment was the acquisition of a significant interest in Coal of Africa
Ltd. The CEO of Mosomo, Mr. Kgomotso Brian Mosehla, has been appointed to
the Net1 board with immediate effect. Mr. Mosehla is a chartered accountant
with extensive banking, corporate and board directorship experience.
Other partners in the BEE consortium include:
* A grouping of community-focused organizations led by black women,
including Abigails Womens Movement, Jerusalem Burial Club, Ubuhlobo, Luzuko
Lwethu, Immanuel Soup Kitchen and Garden, Elukhuselweni Children`s Home,
Mayibuye Project, Club 40, Simelela Rape Centre, Bancedeni, Empilweni
Project and the Amy Bill Foundation;
* Several community development enterprises, including the Ekurhuleni
Metropolitan Municipality Regional Early Childhood Development Forum,
Kwakhanya Wellness Community Development Project, Sosebenza Cultural Group,
Ekuphumleni Frail and Aged Care Centre, Tembaletu School for Handicapped
Black Children, Sinethemba HIV AIDS Support Centre, Ubuhlobo Womens Society
and Imbiza Yomama Burial Society; and
* The Net1 Foundation, a charitable foundation focused on uplifting
communities in which Net1 operates. Beneficiaries of grants and
infrastructure development projects provided by the Net1 Foundation will
include Net1`s black employees, as well as children, pensioners, the
disabled, unemployed and rural poor.
"This is a landmark empowerment deal for Net1 and a transaction which will
have real impact for all involved," said Dr. Serge Belamant, Chairman and
CEO of Net1. "On behalf of the Board, I would like to welcome our new
partners to the group. The transaction fulfills our desire to establish a
broad-base of BEE shareholders in Net1 and the parties will bring fresh
perspective and experience to the table. Importantly, our new partners will
help strengthen the long term sustainability of our business in South
Africa," he concluded.
Brian Mosehla, CEO of Mosomo, commented: "Mosomo and its partners have
substantial experience that will enable us to assist Net1`s business
development initiatives both in South Africa and other emerging markets. Our
focus will be on helping expand Net1`s product offerings in financial
services and healthcare processing, which will become increasingly important
across the African continent with the advent of several large scale national
projects, as well as general transaction processing activities."
Net1 believes that the conclusion of the option agreement with the BEE
consortium is critical and strategically important for the following
reasons:
* Tangible participation to achieve the objectives of BBBEE: Net1
believes that broad-based BEE participation is an important component of
sustainable economic growth and social development in South Africa, and
therefore imperative for the future success of its significant South African
operations. Over the years, Net1 has taken a number of actions to increase
the empowerment of black South Africans, including employment equity, skills
development, preferential procurement, enterprise development and corporate
social investment. Net 1 believes that these actions should culminate in the
provision of a mechanism that will enable significant BEE ownership in Net1
as tangible proof of its commitment to the objectives of BEE, and compliance
with the established codes of good practice and transformation charters;
* Preserving and enhancing Net1`s current business in South Africa: The
South African government has promulgated the country`s Codes of Good
Practice on Broad-Based Black Economic Empowerment as a means to address the
effects of entrenched inequalities and to improve the participation of
previously disadvantaged people in economic activity. Achievement of BEE
objectives is measured by a scorecard which establishes a weighting to
various components of BEE, of which direct black ownership in an enterprise
is a key component. Net1`s current and prospective South African customers
(most especially the South African government) expect compliance with spirit
and letter of the law in this regard, and are increasingly demanding a
higher BBBEE score in terms of the scorecard as a condition of their
procurement from the Company. Net1 believes that its BEE score will improve
significantly if the BEE consortium exercises the option in full, allowing
the Company to retain its current customers and improve its ability to
contract with new customers, especially in the public sector;
* Assistance with key business development initiatives: The BEE
consortium members, especially Mosomo, have extensive and relevant business
experience that can greatly assist Net1`s business development initiatives
in South Africa and most other African countries, with specific focus on
Net1`s product offerings in financial services, healthcare processing and
payment transaction processing inclusive of value added services such as
bill payments and pre-paid utilities.
About Net1 (www.net1.com)
Net1 is a leading provider of alternative payment systems that leverage its
Universal Electronic Payment System, or UEPS, to facilitate biometrically
secure real-time electronic transaction processing to unbanked and under-
banked populations of developing economies around the world in an online or
offline environment. In addition to payments, UEPS can be used for banking,
healthcare management, payroll, remittances, voting and identification.
Net1 operates market-leading payment processors in South Africa, Republic of
Korea, Ghana and Iraq. In addition, Net1`s proprietary Mobile Virtual Card
technology offers secure mobile payments and banking services in developed
and emerging countries while its MediKredit and XeoHealth subsidiaries
provide its proprietary 5010 and ICD-10 compliant real-time claims
adjudication system.
Net1 has a primary listing on the Nasdaq and a secondary listing on the JSE
Limited.
About Mosomo
Mosomo Investment Holdings (Pty) Ltd is a BEE investment company with a
proven track record in the mining, financial services and mass banking
sectors. The company is headed by CEO Brian Kgomotso Mosehla, a chartered
accountant with extensive corporate and board directorship experience. Mr.
Mosehla was formerly head of corporate finance and new business at
Mvelaphanda. He is a director of Coal of Africa Limited, was formerly a
senior member of the corporate finance division at African Merchant Bank,
and has served as an executive director of Mvelaphanda Resources and also as
non-executive director of Unitrans Ltd.
Forward-Looking Statements
This announcement contains forward-looking statements that involve known and
unknown risks and uncertainties. A discussion of various factors that cause
our actual results, levels of activity, performance or achievements to
differ materially from those expressed in such forward-looking statements
are included in our filings with the Securities and Exchange Commission. We
undertake no obligation to revise any of these statements to reflect future
events.
For media information please contact Brunswick South Africa:
Rob Pinker, +27 83 326 7794 / +27 11 502 7300
Marina Bidoli, +27 83 253 0478 / +27 11 502 7300
Investor Relations Contact:
Dhruv Chopra
Vice President of Investor Relations
Phone: +1-212-626-6675
Email: dchopra@net1.com
Johannesburg
26 January 2012
Legal counsel to Net1 : DLA Cliffe Dekker Hofmeyr
Legal counsel to Mosomo: Tony Tshivhase Incorporated
Financial Adviser and Sponsor to Net1
Deutsche Securities (SA) (Proprietary) Limited
Date: 26/01/2012 15:00:11 Supplied by www.sharenet.co.za
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