Net1 finalizes financing for Blue Label Telecoms strategic investment

JOHANNESBURG, SOUTH AFRICA--(Marketwired - October 25, 2016) - Net 1 UEPS Technologies, Inc. ("Net1" or the "Company") (NASDAQ: UEPS) (JSE: NT1) today announced that it has procured the necessary bank funding to complete its previously-announced strategic investment of an approximate 15% equity stake in Blue Label Telecoms Limited, a JSE-listed company which is a leading provider of prepaid electricity and airtime in South Africa ("Blue Label"). The Company expects to use a combination of existing cash reserves, a portion of the loan facilities and the previously-announced equity placement to facilitate payment of the ZAR 2 billion subscription price.

The Company expects the Blue Label transaction to close immediately after Blue Label shareholder approval is obtained at a meeting scheduled for November 16, 2016.

The bank funding comprises two-year loan facilities from FirstRand Bank Limited, acting through its Rand Merchant Bank division ("RMB") for an aggregate of ZAR 1.4 billion which will be used, among other things, to finance a portion of the investment in Blue Label. Interest rates on the loans are linked to one-month Johannesburg Interbank Average Rate ("JIBAR"), currently approximately 7.1% plus margins on the loans varying from 1.35% to 2.75%, with an average margin on fully utilized loans of 2.25%. The Company has used the loan facilities, plus ZAR 600 million of its existing cash reserves to procure a ZAR 2 billion guarantee from RMB in favour of Blue Label. The Company expects to close its equity placement in November 2016 and receive $45.0 million from the issuance of 5,000,000 shares of its common stock.

About Net1 (www.net1.com)

Net1 is a leading provider of alternative payment systems that leverage its Universal Electronic Payment System ("UEPS") or utilize its proprietary mobile technologies. The Company operates market-leading payment processors in South Africa and the Republic of Korea. Through Transact24, Net1 offers debit, credit and prepaid processing and issuing services for Visa, MasterCard and ChinaUnionPay in China and other territories across Asia-Pacific, Europe and Africa, and the United States. Through Masterpayment, Net1 provides payment processing and enables working capital financing in Europe.