JOHANNESBURG - Financial services group Net 1 UEPS Technologies said on Friday it had entered into a transaction with minority shareholders in DNI-4PL Contracts (DNI) to reduce its stake in the company to 38 percent from 55 percent to settle a R400 million vendor obligation.
Net1 had, through its wholly owned subsidiary Net1 Applied Technologies South Africa, increased its shareholding in DNI from 49 percent last April to address the needs of the un-banked and under-banked population.
On Friday it said it would use the proceeds from the sale to settle its R400 million obligation as full and final settlement of the amount due in the DNI investment deal.
DNI is engaged in retail communication and distribution of mobile subscriber starter packs and pre-paid airtime services. Net1 controls a number of companies, including former service provider for social grants payments Cash Paymaster.
Under the terms of Net1 SA's subscription agreement with DNI, it agreed to pay an additional amount of up to R400 million, or U.S.$28.2 million. DNI will distribute this amount to its other shareholders.
Net1 chief executive Herman G. Kotzé said the latest transaction was in line with the group's corporate strategic review.
"As we continue our corporate strategic review of our entire business, this transaction represents a first step in realizing our goals of strengthening our balance sheet, focusing our efforts on fintech services, and unlocking the value of our operating businesses and investment portfolio," he said.