Yesterday, Net1 UEPS Technologies announced it had terminated its agreement to buy part of Blue Label Telecoms, although it will still aims to buy 15% of Cell C for R2-billion, and a stake in DHI-4PL Contracts.
The board has issued a statement clarifying these announcements:
“The board of Net1 wishes to clarify that its recently appointed CEO did not unilaterally terminate the subscription agreement with Blue Label. The decision not to invest was made by the full Net1 board before the end of May 2017.
“The proposed three investments by Net1 required the utilisation of cash reserves, bank finance and the issuance of shares of its common stock to fund the transactions.
“The material reduction in the Net1 share price in the first five months of 2017 and the lack of volume demand for its shares at this time would have made it detrimental to Net1 shareholder value for it to proceed with a share placement. The board accordingly concluded that Net1 could only use cash resources and bank debt and could therefore only conclude two of the three investments.
“Net1 approached Blue Label on these matters and both parties mutually agreed that Net1 would not subscribe for shares in Blue Label and would proceed only with the investments in Cell C and DNI. Blue Label would replace the Net1 subscription with a private placement with other parties to part fund its investment in Cell C.”