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
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