Johannesburg- and New York-listed Electronic payments specialist Net1 UEPS Technologies has failed to conclude a black economic empowerment deal, blaming investigations around its winning of a multibillion-rand tender for the payment of South African social grants.
A one-year option granted to empowerment grouping Business Venture Investments to buy almost 9m shares in Net1 at an exercise price of US$8,96/share has expired without being exercised.
Business Venture Investments is a special purpose vehicle that represents a consortium of black South Africans, community groups and the Net1 Foundation.
Net1 says that it is now working with the consortium to evaluate alternatives to “ensure the company’s empowerment objectives will be met”.
CEO Serge Belament blames Net1’s legal battle with Absa subsidiary AllPay, which had also bid for the multibillion-rand South Africa Social Services Agency payments tender but lost, for torpedoing the empowerment transaction. The supreme court of appeal recently found in favour of Net1 against AllPay, but investigations by the US department of justice and the Securities & Exchange Commission are ongoing.
Net1 says these problems “thwarted any chance that [the consortium] may have had to raise the funds required to exercise the funds required to exercise the option”.
“I am disappointed that our attempt to embrace South African economic empowerment policies has failed due to circumstances beyond our control,” says Belament.
The empowerment consortium will continue to be represented through a seat on the Net1 board, Belament says. — (c) 2013 NewsCentral Media
