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Borrowings | 3 Months Ended
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Sep. 30, 2018
Borrowings [Abstract] |
Borrowings | 10. Borrowings South Africa The amounts below have been translated at exchange rates applicable as of the dates specified. July 2017 Facilities, as amended, comprising a short-term facility and long-term borrowings Long-term borrowings – Facilities A, B, C and D The Company's South African amended July 2017 Facilities agreement is described in Note 14 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2018. The carrying value of these long-term borrowings as of September 30, 2018, was ZAR 529.9 million ($37.5 million), net of deferred fees of ZAR 2.6 million ($0.2 million), and the carrying amount approximated its fair value. Interest on these term loans is payable on the last business day of March, June, September and December of each year and on the final maturity date based on the Johannesburg Interbank Agreed Rate ("JIBAR") in effect from time to time plus a margin of 2.75%. The JIBAR has been set at 7.00% for the period to December 28, 2018, in respect of the loans provided under the South African long-term facilities agreement. The next scheduled principal repayment of ZAR 151.3 million ($10.7 million, translated at exchange rates applicable as of September 30, 2018) is due on December 28, 2018. Short-term facility - Facility E On September 26, 2018, Net1 Applied Technologies South Africa Proprietary Limited ("Net1 SA") further amended its amended July 2017 Facilities agreement with Rand Merchant Bank, a divison of FirstRand Bank Limited ("RMB") to include an overdraft facility ("Facility E") of up to ZAR 1.5 billion ($106.1 million) to fund the Company's ATMs. Interest on the overdraft facility is payable on the last day of each month and on the final maturity date based on South African prime rate less a margin of 1.00%. The overdraft facility matures on September 26, 2019. The overdraft facility amount utilized must be repaid in full within one month of utilization and at least 90% of the amount utilized must be repaid with 25 days. The overdraft facility is secured by a pledge by Net1 SA of, among other things, cash and certain bank accounts utilized in the Company's ATM funding process, the cession of an insurance policy with Senate Transit Underwriters Managers Proprietary Limited, and any rights and claims Net1 SA has against Grindrod Bank Limited. The Company paid a non-refundable origination fee of approximately ZAR 3.6 million ($0.2 million) in October 2018. As at September 30, 2018, the Company had utilized approximately ZAR 1.1 billion ($76.6 million translated at exchange rates applicable as of September 30, 2018) of this overdraft facility. This ZAR 1.5 billion overdraft facility may only be used to fund ATMs and therefore the overdraft utilized and converted to cash to fund the Company's ATMs is considered restricted cash. The prime rate on September 30, 2018, was 10.0%. Nedbank facility, comprising short-term facilities As of September 30, 2018, the aggregate amount of the Company's short-term South African credit facility with Nedbank Limited was ZAR 700.0 million ($49.5 million) and consists of (i) a primary amount of up to ZAR 450 million ($31.8 million, (ii) a temporary amount of ZAR 250.0 million (17.7 million), and (iii) a secondary amount, which has been temporarily withdrawn as discussed below. The primary amount comprises an overdraft facility of (i) up to ZAR 300 million ($21.2 million), which is further split into (a) a ZAR 250.0 million ($17.7 million) overdraft facility which may only be used to fund ATMs used at pay points and (b) a ZAR 50 million ($3.5 million) general banking facility and (ii) indirect and derivative facilities of up to ZAR 150 million ($10.6 million), which include letters of guarantees, letters of credit and forward exchange contracts. The temporary amount has been made available until January 31, 2019, at which time any amount utilized must be repaid in full and the secondary amount of ZAR 200.0 million ($14.1 million) will be made available again. The ZAR 250.0 million component of the primary amount may only be used to fund ATMs and therefore this component of the primary amount utilized and converted to cash to fund our ATMs is considered restricted cash. As of September 30, 2018, the interest rate on the overdraft facility was 8.85%. The Company has ceded its investment in Cash Paymaster Services Proprietary Limited ("CPS"), a South African subsidiary, as well as all of its rights, title and interest in an insurance policy issued by Fidelity Risk Proprietary Limited as security for its repayment obligations under the facility. A commitment fee of 0.35% per annum is payable on the monthly unutilized amount of the overdraft portion of the short-term facility. The Company is required to comply with customary non-financial covenants, including, without limitation, covenants that restrict its ability to dispose of or encumber its assets, incur additional indebtedness or engage in certain business combinations. As of September 30, 2018, the Company has utilized approximately ZAR 115.6 million ($8.2 million) of its ZAR 250 million overdraft facility to fund ATMs. As of September 30, 2018 and June 30, 2018, the Company had utilized approximately ZAR 132.2 million ($9.3 million) and ZAR 108.0 million ($7.9 million), respectively, of its indirect and derivative facilities of ZAR 150 million to enable the bank to issue guarantee, letters of credit and forward exchange contracts, in order for the Company to honor its obligations to third parties requiring such guarantees (refer to Note 19). June 2018 Facility, a long-term borrowing The Company's South African long-term facility agreement is described in Note 14 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2018. The current carrying value as of September 30, 2018, was ZAR 115.0 million ($8.1 million). Interest on the revolving credit facility is payable quarterly based on JIBAR in effect from time to time plus a margin of 2.75%. The Company paid a non-refundable origination fee of approximately ZAR 2.0 million ($0.1 million) during the three months ended September 30, 2018. United States, a short-term facility On September 14, 2018, the Company renewed its $10.0 million overdraft facility from Bank Frick. The interest rate on the facilities is 4.50% plus 3-month US dollar LIBOR and interest is payable quarterly commencing on September 30, 2018. The 3-month US dollar LIBOR rate was 2.39838% on September 28, 2018. The facility has no fixed term, however, it may be terminated by either party with six weeks written notice. The facility is secured by a pledge of the Company's investment in Bank Frick. As of September 30, 2018, the Company had utilized approximately $3.3 million of this facility. South Korea, comprising long-term borrowings The Company's South Korean senior secured loan facility is described in Note 14 to its audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2018. On July 29, 2017, the Company utilized approximately KRW 0.3 billion ($0.3 million) of its Facility C revolving credit facility to pay interest due on the Company's South Korean senior secured loan facility. On October 20, 2017, the Company made an unscheduled repayment of $16.6 million and settled the full outstanding balance, including interest, related to these borrowings. Movement in short-term credit facilities Summarized below are the Company's short-term facilities as of September 30, 2018, and the movement in the Company's short-term facilities from as of June 30, 2018 to as of September 30, 2018:
|  | South Africa |  |  | United States |  |  |
|  | Amended |  |  |  |  |  |  |  |
|  | July 2017 |  | Nedbank |  |  | Bank Frick |  | Total |
Short-term facilities as of September 30, 2018: | $ | 106,054 | $ | 49,492 |  | $ | 10,000 | $ | 165,546 |
Overdraft |  | - |  | 21,211 |  |  | 10,000 |  | 31,211 |
Overdraft restricted as to use for ATM funding only |  | 106,054 |  | 17,676 |  |  | - |  | 123,730 |
Indirect and derivative facilities |  | - |  | 10,605 |  |  | - |  | 10,605 |
Movement in utilized overdraft facilities: |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2018 |  | - |  | - |  |  | - |  | - |
Utilized |  | 73,500 |  | 7,842 |  |  | 3,313 |  | 84,655 |
Foreign currency adjustment(1) |  | 3,105 |  | 331 |  |  | - |  | 3,436 |
Balance as of September 30, 2018 |  | 76,605 |  | 8,173 |  |  | 3,313 |  | 88,091 |
Restricted as to use for ATM funding only |  | 76,605 |  | 8,173 |  |  | - |  | 84,778 |
No restrictions as to use |  | - |  | - |  |  | 3,313 |  | 3,313 |
Movement in utilized indirect and derivative facilities: |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2018 |  | - |  | 7,871 |  |  | - |  | 7,871 |
Guarantees cancelled |  | - |  | (848 | ) |  | - |  | (848 | )
Utilized |  | - |  | 2,436 |  |  | - |  | 2,436 |
Foreign currency adjustment(1) |  | - |  | (110 | ) |  | - |  | (110 | )
Balance as of September 30, 2018 | $ | - | $ | 9,349 |  | $ | - | $ | 9,349 |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. Movement in long-term borrowings Summarized below is the movement in the Company's long term borrowing from as of June 30, 2018 to as of September 30, 2018:
|  | South Africa |  |  |
|  | Amended |  |  | June 2018 |  |  |
|  | July 2017 |  |  | Facility |  | Total |
Included in current portion of long-term borrowings | $ | 44,695 |  | $ | - | $ | 44,695 |
Included in long-term borrowings |  | 5,469 |  |  | - |  | 5,469 |
Balance as of June 30, 2018 |  | 50,164 |  |  | - |  | 50,164 |
Utilized |  | - |  |  | 7,801 |  | 7,801 |
Repaid |  | (10,260 | ) |  | - |  | (10,260 | )
Foreign currency adjustment(1) |  | (2,438 | ) |  | 330 |  | (2,108 | )
Balance as of September 30, 2018 |  | 37,466 |  |  | 8,131 |  | 45,597 |
Included in current portion of long-term borrowings |  | 33,937 |  |  | - |  | 33,937 |
Included in long-term borrowings | $ | 3,529 |  | $ | 8,131 | $ | 11,660 |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. The Company paid a non-refundable deal origination fee of approximately ZAR 6.3 million ($0.6 million) in August 2017. Interest expense incurred under the Company's South African long-term borrowing during the three months ended September 30, 2018 and 2017, was $1.1 million and $1.7 million, respectively. The prepaid facility fees amortization charged included in interest expense during each of the three months ended September 30, 2018 and 2017, was $0.1 million, respectively. Interest expense incurred under the Company South Korean long-term borrowings during the three months ended September 30, 2017, was $0.2 million and prepaid facility fees amortized were $0.03 million.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -URI http://asc.fasb.org/topic&trid=2208564 + Details
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