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Net1 extends Blue Label subscription date, amends related guarantee; announces proposed investments in Cell C & DNI
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 extends Blue Label subscription date and amends related guarantee;
announces proposed investments in Cell C and DNI
Johannesburg, March 1, 2017 – Net1 (NasdaqGS: UEPS; JSE: NT1) today announced
that it has agreed with Blue Label Telecoms Limited (“Blue Label”) to extend the
subscription date for the Company's proposed 15% investment in Blue Label. On
February 27, 2017 Blue Label announced that it was party to a binding umbrella
restructure agreement with Cell C and other relevant parties, in terms of which Blue
Label’s proposed subscription for 45% of the share capital of Cell C was confirmed.
The binding restructure agreement is subject to the conclusion of the relevant
transaction agreements by no later than June 30, 2017.
Net1 and Blue Label have accordingly agreed to extend the subscription date from
February 28, 2017, to no later than June 30, 2017, in order to afford Blue Label the
necessary flexibility to close its proposed Cell C transaction.
The Company, Blue Label and FirstRand Bank Limited, acting through its Rand
Merchant Bank division (“RMB”) have agreed to amend the ZAR 2 billion guarantee
issued by RMB in favour of Blue Label by extending the expiry date to May 31,
2017. All other terms of the loan facilities obtained from RMB in October 2016
remain the same.
The Company is also a party to the umbrella restructure agreement with Cell C and
has offered to acquire a direct stake of 15% of the issued share capital of Cell C for a
consideration of ZAR 2 billion.
The Company has also concluded a memorandum of understanding to acquire 49.6%
of DNI-4PL Contracts (Pty) Ltd (“DNI”), with an option to acquire a controlling stake
in DNI in the future. DNI is the leading distributor of mobile subscriber starter packs
for Cell C and also distributes pre-paid airtime through an extensive network of field
operatives and agents.
The proposed investments in Cell C and DNI are subject to certain conditions,
including the satisfactory completion of due diligence, the required internal and
external approvals and the execution of definitive transaction agreements. The
Company intends to settle the purchase consideration for these two investments using
a combination of surplus cash, debt and new equity placement.
“The combination of the diverse technological, commercial and logistical capabilities
of Net1, Blue Label, Cell C and DNI provides a substantial and compelling business
case for us,” said Serge Belamant, Chairman and CEO of Net1. “We are very excited
about concluding these transformational transactions and will provide further details
regarding the rationale for these transactions, the final consideration paid and the
funding structure when the transactions close.”
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.
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 proposed investments in Blue Label,
Cell C and DNI not closing; RMB failing to provide the loans or honour the
guarantee; failing to conclude an equity placement; or failure by the Company to
realize the anticipated benefits from these transactions; 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, 2016, 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
Financial Adviser and Transaction Sponsor:
Rand Merchant Bank, a division of FirstRand Bank Limited
Johannesburg
March 1, 2017
Sponsor:
Rand Merchant Bank, a division of FirstRand Bank Limited
Date: 01/03/2017 03:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE').
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