Johannesburg - Net1 UEPS Technologies had issued 4.4 million shares at R60 each to its black economic empowerment (BEE) partners after concluding a relationship agreement, the technology company said yesterday.
The shares are locked in for five years. The value of the shares was calculated as 75 percent of the closing price of the company’s common stock on the JSE on Friday.
“Net1 Applied Technologies South Africa will lend the funds to the BEE partners at a market-related interest rate to effect the purchase of the BEE shares and these shares will act as the collateral for the loan,” said the company, whose Cash Paymaster Services subsidiary won the R10 billion contract to be the sole distributor of South Africa’s social grants for five years.
The shareholders would repay the loan over five years and the transactions were subject to certain conditions, including obtaining the relevant regulatory approvals, it added.
No further comment was forthcoming from Serge Belamant, the chairman and chief executive of Net1, chief financial officer Herman Kotze, and Brian Mosehla, the chief executive of Mosomo Investment Holdings, which is leading member of the BEE consortium.
Belamant said in the statement: “Having signed our relationship agreements we continue to make strides towards concluding our BEE transaction, which we believe epitomises the spirit of the meaningful transformation that the late president [Nelson] Mandela fought and stood for.
“Our actions in this regard lay the foundation for a long-term sustainable business in South Africa together with the addition of BEE partners, who we expect to be actively engaged in identifying and driving new growth opportunities for the company.”
On December 3 Bronstein, Gewirtz & Grossman, a US corporate litigation boutique, said it was investigating potential claims on behalf of purchasers of the securities of Net1 UEPS Technologies and invited input from other shareholders. It did not mention the sources of the claims.
“The investigation concerns whether Net1 and certain of its officers and/or directors have violated sections 10 (b) and 20 (a) of the Securities Exchange Act of 1934,” the firm said.
On November 29, the Constitutional Court ruled that the tender process followed by the SA Social Security Agency in awarding the social grant distribution contract to Cash Paymaster Services last year was constitutionally invalid. The Constitutional Court will sit on February 11 next year to determine a remedy.
Net1 closed 2.5 percent up at R82 on the JSE yesterday. - Business Report