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NET 1 UEPS TECHNOLOGIES INC - Net1 Announces $107 million Equity Investment by International Finance Corporation and IFC Asset Management Company

Release Date: 12/04/2016 07:05
Code(s): NT1     PDF:  
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Net1 Announces $107 million Equity Investment by International Finance Corporation and IFC Asset Management Company

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 Announces $107 million Equity Investment by International Finance
Corporation and IFC Asset Management Company Funds

Johannesburg, April 12, 2016 – Net1 (NasdaqGS: UEPS; JSE: NT1) today announced
that it has entered into an agreement with International Finance Corporation and
certain funds managed by IFC Asset Management Company (collectively, “IFC”)
pursuant to which IFC has agreed to subscribe for 9.98 million shares of the
Company’s common stock at a subscription price of $10.79 per share, for total
proceeds of $107.7 million. The subscription price represents a 20,6% premium over
the closing price of the Company’s shares on Nasdaq on April 8, 2016. IFC will have
an 18% interest in the Company following the transaction. Net1 will use the proceeds
of the IFC investment primarily for the expansion of its business and technological
solution in emerging markets across the globe.

IFC is a member of the World Bank Group and is the largest global development
institution focused on the private sector in emerging markets. IFC has been investing
in disruptive technologies around the world to help expand access to financial
services and as of March 2016 had invested approximately $180 million in 26
financial technology companies around the world, servicing over 220 million people.
This is on top of billions of dollars already invested in its successful, decades-long
program in support of traditional banks and microfinance institutions.

Closing of the investment is expected to occur during the month of April. IFC will
have the right to nominate an independent director to the Net1 board.

“IFC’s equity investment in Net1 represents a landmark moment for the Company,”
said Serge Belamant, Chairman and CEO of Net1. “We are honored that IFC has
selected Net1 for its largest investment ever in the financial technology sector. IFC’s
investment recognizes the achievements, disruptive technologies and business model
of the Company and its employees. We are completely aligned with IFC through our
shared vision of providing financial inclusion to the billions of unbanked and under-
banked citizens of the world and we look forward to the opportunities presented by
IFC’s expansive global network and expertise,” he concluded.

Atul Mehta, IFC Director of Telecoms, Media and Technology, said: “Net1 has
created impressive propriety technology for the delivery of services and demonstrated
its effectiveness in South Africa. IFC and IFC AMC’s funds’ investments will help
Net1 expand regionally, especially into African countries where there is limited
banking infrastructure and availability of financial services for the poorest segments
of the population.”

Gavin E.R. Wilson, CEO of IFC Asset Management Company, said: “Our investment
in Net1 recognizes the Company’s demonstrated ability to provide efficient payments
services to the unbanked and underbanked in South Africa while innovating in
commercially viable ways. Our goal is to help Net1 use its technology to broaden its
product offering and expand its customer base to other countries.”

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal
Electronic Payment System (“UEPS”) or utilize its proprietary mobile technologies.
The Company operates market-leading payment processors in South Africa and the
Republic of Korea. Through Transact24, Net1 offers debit, credit and prepaid
processing and issuing services for Visa, MasterCard and ChinaUnionPay in China
and other territories across Asia-Pacific, Europe and Africa, and the United States.
Through Masterpayment, Net1 provides payment processing and enables working
capital financing in Europe.
UEPS permits the Company 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. Net1’s UEPS/EMV
solution is interoperable with global EMV standards that seamlessly enable access to
all the UEPS functionality in a traditional EMV environment. In addition to
payments, UEPS can be used for banking, healthcare management, payroll,
remittances, voting and identification.
Net1’s mobile technologies include its proprietary mobile payments solution - MVC,
which offers secure mobile-based payments, as well as mobile banking and prepaid
value-added services in developed and emerging countries. The Company intends to
deploy its varied mobile solutions through its ZAZOO business unit, which is an
aggregation of innovative technology companies and is based in the United Kingdom.
Net1 has a primary listing on the NASDAQ and a secondary listing on the
Johannesburg Stock Exchange.

About IFC (www.ifc.org)
IFC, a member of the World Bank Group, is the largest global development institution
focused on the private sector in emerging markets. Working with more than 2,000
businesses worldwide, we use our capital, expertise, and influence, to create
opportunity where it’s needed most. In FY15, our long-term investments in
developing countries rose to nearly $18 billion, helping the private sector play an
essential role in the global effort to end extreme poverty and boost shared prosperity.

About IFC Asset Management Company (www.ifcamc.org)
IFC Asset Management Company LLC (AMC), a wholly-owned subsidiary of IFC,
invests third party capital, enabling investors to benefit from IFC’s expertise in
achieving strong equity returns, as well as positive development impact in the
countries in which it invests. AMC has raised $8.7 billion of capital across 11
investment funds. Three AMC managed funds, including the IFC African, Latin
American and Caribbean Fund (ALAC Fund), the IFC Financial Institutions Growth
Fund (FIG Fund) and the Africa Capitalization Fund, are participating in the Net 1
investment. For more information.

Forward-Looking Statements

This press release contains forward-looking statements that involve substantial risks
and uncertainties. All statements, other than statements of historical fact, included in
this press release regarding strategy, future operations, future financial position, future
revenues, projected costs, prospects, plans and objectives of management are forward-
looking statements. The Company may not actually achieve the plans, intentions or
expectations disclosed in its forward-looking statements. Actual results or events
could differ materially from the plans, intentions and expectations disclosed in the
forward-looking statements that the Company makes. Factors that might cause such
differences include, but are not limited to: the possibility that the expected benefits
from the IFC investment will not be realized; disruption from the investment making
it more difficult to maintain business and operational activities; and other factors,
many of which are beyond the Company’s control; and other important factors
included in the Company’s reports filed with the Securities and Exchange
Commission, particularly in the “Risk Factors” section of the Company’s Annual
Report on Form 10-K for the fiscal year ended June 30, 2015, as such Risk Factors
may be updated from time to time in subsequent reports. The Company does not
assume any obligation to update any forward-looking statements, whether as a result
of new information, future events or otherwise.

Investor Relations Contact:
Dhruv Chopra
Head of Investor Relations
Phone: +1-917-767-6722
Email: dchopra@net1.com

Johannesburg
April 12, 2016

Sponsor:
Deutsche Securities (SA) Proprietary Limited

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