Net 1 UEPS Technologies, Inc. (NASDAQ:UEPS) has recently revealed entering into a share purchase agreement with Blue Label Telecoms Limited (JSE:BLU).
Terms of Agreement
Under the agreement, Net 1 UEPS Technologies will subscribe for roughly 118 million common shares of Blue Label Telecoms for $1.23 each. As a result of the subscription, Net 1 UEPS Technologies will acquire about 15% of the common shares of Blue Label Telecoms.
The implementation is subject to final approval of Blue Label Telecoms shareholders. Once implemented, the subscription will entitle Net 1 UEPS Technologies the right to appoint a Blue Label Telecoms Board Director.
The aggregate subscription consideration payable to the latter is $144 million. Net 1 UEPS Technologies will settle the subscription consideration using its cash resources, debt instruments, and the equity issuance of five million common shares at $9 each.
“This investment cements the start of a multi-layered strategic alliance between our two groups that will greatly enhance shareholder value on both sides through cooperation between our combined local and international operations,” commented Serge Belamant, Net 1 UEPS Chairman and CEO.
Brett Levy and Mark Levy, Blue Label Telecoms CEO, the strategic collaboration can tap millions of consumers every day, creating robust opportunities that can thrive through market instabilities.
Blue Label Telecoms has recently revealed on Wednesday that it is planning to acquire 45% of Cell C, the third biggest telecommunications operator in South Africa.
The potential investment will help accelerate the growth of the three companies as they combine their respective user bases and facilities.
Net 1 UEPS Technologies Share Subscription Agreements
In August, Net 1 UEPS Technologies has also entered into a share subscription agreement with One MobiKwik Systems Private Ltd., the biggest independent e-payment network in India.
The company joins a long list of shareholders that include founders, executive officers, American Express Company (NYSE:AXP), Cisco Systems, Inc. (NASDAQ:CSCO) Cisco Investments, GMO Payment Gateway Inc (TYO:3769), MediaTek Inc. (TPE:2454), Sequoia Capital, and Tree Line Asia.
Net 1 UEPS Technologies has surged 22.09% toward Wednesday’s close to $11. Meanwhile, American Express has closed at $64.36; and Cisco Systems at $31.59.