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Borrowings | 9 Months Ended
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Mar. 31, 2019
Borrowings [Abstract] |
Borrowings | 11. 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/A for the year ended June 30, 2018. The carrying value of these long-term borrowings as of March 31, 2019, was ZAR 229.1 million ($15.8 million), net of deferred fees of ZAR 0.9 million ($0.1 million), and the carrying amount approximated its fair value. Interest on these term loans was 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 7.15% for the period to June 29, 2019, in respect of the loans provided under the South African long-term facilities agreement. The next principal repayment of ZAR 151.3 million ($10.6 million, translated at exchange rates applicable as of March 31, 2019) was scheduled to be paid on June 29, 2019, however the Company settled the outstanding amount of ZAR 230.0 million ($15.9 million, translated at exchange rates applicable as of March 31, 2019) in full on May 3, 2019, utilizing a combination of existing cash reserves and through the sale of DNI shares as discussed in Note 2. Short-term facility - Facility E On September 26, 2018, Net1 further amended its amended July 2017 Facilities agreement with RMB to include an overdraft facility ("Facility E") of up to ZAR 1.5 billion ($103.6 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 the South African prime rate less a margin of 1.00%. The overdraft facility is up for review 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, any rights and claims Net1 SA has against Grindrod Bank Limited, and, in March 2019, the Company also agreed to provide RMB with the cession of a Company U.S. dollar denominated bank account. The Company paid a non-refundable origination fee of approximately ZAR 3.8 million ($0.3 million) in October 2018. As at March 31, 2019, the Company had utilized approximately ZAR 1.1 billion ($72.8 million translated at exchange rates applicable as of March 31, 2019) 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 March 31, 2019, was 10.25%. Nedbank facility, comprising short-term facilities On February 28, 2019, the aggregate amount of the Company's short-term facility with Nedbank Limited was reduced from ZAR 700 million to ZAR 450 million, as a result of the reduction of the general banking facility from ZAR 300 million to ZAR 50 million. As of March 31, 2019, the aggregate amount of the Company's short-term South African credit facility with Nedbank was ZAR 450.0 million ($31.1 million) and consists of (i) a primary amount of up to ZAR 450 million ($31.1 million) and (ii) 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 ($20.7 million), which is further split into (a) a ZAR 250.0 million ($17.3 million) overdraft facility which may only be used to fund ATMs used at pay points and (b) a ZAR 50 million ($3.4 million) general banking facility and (ii) indirect and derivative facilities of up to ZAR 150 million ($10.4 million), which include letters of guarantees, letters of credit and forward exchange contracts. 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. The short-term facility provides Nedbank with the right to set off funds held in certain identified Company bank accounts with Nedbank against any amounts owed to Nedbank under the facility. As of March 31, 2019, the Company had total funds of $4.2 million in bank accounts with Nedbank which have been set off against $5.6 million drawn under the Nedbank facility, for a net amount drawn under the facility of $1.4 million. As of March 31, 2019, the interest rate on the overdraft facility was 9.10%. 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 March 31, 2019, the Company has utilized approximately ZAR 81.4 million ($5.6 million) of its ZAR 250 million overdraft facility to fund ATMs and utilized none of its ZAR 50 million general banking facility and temporary facility. As of March 31, 2019 and June 30, 2018, the Company had utilized approximately ZAR 96.7 million ($6.7 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 guarantees, 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 20). June 2018 Facility, a long-term borrowing (a DNI facility) 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/A for the year ended June 30, 2018. DNI is the primary party to this facility and these long-term borrowings have been deconsolidated as of March 31, 2019, following the transaction referred to in Note 2. 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 and nine months ended March 31, 2019. United States, a short-term facility On September 14, 2018, the Company renewed its $10.0 million overdraft facility from Bank Frick and on February 4, 2019, the Company increased the overdraft facility to $20.0 million. The interest rate on the facilities is 4.50% plus 3-month US dollar LIBOR and interest is payable on a quarterly basis. The 3-month US dollar LIBOR rate was 2.59975% on March 31, 2019. 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 March 31, 2019, the Company had utilized approximately $8.9 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/A 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. This facility is no longer available. South Korea, a short-term facility The Company obtained a one year KRW 10 billion ($10.0 million) short-term overdraft facility from Hana Bank, a South Korean bank, in January 2019. The interest rate on the facilities is 1.984% plus the 3-month CD rate. The CD rate as of March 31, 2019 was 1.87%. The facility expires in January 2020, however can be renewed. The facility is unsecured with no fixed repayment terms. As of March 31, 2019, the Company had not utilized this facility. Movement in short-term credit facilities Summarized below are the Company's short-term facilities as of March 31, 2019, and the movement in the Company's short-term facilities from as of June 30, 2018 to as of March 31, 2019:
|  |  |  |  |  |  |  | United |  |  | South |  |  |
|  | South Africa |  |  | States |  |  | Korea |  |  |
|  | Amended |  |  |  |  |  | Bank |  |  |  |  |  |
|  | July 2017 |  |  | Nedbank |  |  | Frick |  |  | Hana |  | Total |
Short-term facilities as of March 31, 2019: | $ | 103,599 |  | $ | 31,080 |  | $ | 20,000 |  | $ | 8,792 | $ | 163,471 |
Overdraft |  | - |  |  | 3,453 |  |  | 20,000 |  |  | 8,792 |  | 32,245 |
Overdraft restricted as to use for ATM |  |  |  |  |  |  |  |  |  |  |  |  |  |
funding only |  | 103,599 |  |  | 17,267 |  |  | - |  |  | - |  | 120,866 |
Indirect and derivative facilities |  | - |  |  | 10,360 |  |  | - |  |  | - |  | 10,360 |
Movement in utilized overdraft facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2018 |  | - |  |  | - |  |  | - |  |  | - |  | - |
Utilized |  | 506,472 |  |  | 64,196 |  |  | 13,857 |  |  | - |  | 584,525 |
Repaid |  | (434,629 | ) |  | (63,202 | ) |  | (4,992 | ) |  | - |  | (502,823 | )
Foreign currency adjustment(1) |  | 945 |  |  | 399 |  |  | - |  |  | - |  | 1,344 |
Balance as of March 31, 2019(2) |  | 72,788 |  |  | 1,393 |  |  | 8,865 |  |  | - |  | 83,046 |
Restricted as to use for ATM |  |  |  |  |  |  |  |  |  |  |  |  |  |
funding only |  | 72,788 |  |  | 1,393 |  |  | - |  |  | - |  | 74,181 |
No restrictions as to use |  | - |  |  | - |  |  | 8,865 |  |  | - |  | 8,865 |
Movement in utilized indirect and derivative |  |  |  |  |  |  |  |  |  |  |  |  |  |
facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2018 |  | - |  |  | 7,871 |  |  | - |  |  | - |  | 7,871 |
Guarantees cancelled |  | - |  |  | (829 | ) |  | - |  |  | - |  | (829 | )
Utilized |  | - |  |  | 47 |  |  | - |  |  | - |  | 47 |
Foreign currency adjustment(1) |  | - |  |  | (411 | ) |  | - |  |  | - |  | (411 | )
Balance as of March 31, 2019 | $ | - |  | $ | 6,678 |  | $ | - |  | $ | - | $ | 6,678 |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Nedbank balance as of March 31, 2019, of $1.4 million comprises the net of total overdraft facilities withdrawn of $5.6 million offset against funds in bank accounts with Nedbank of $4.2 million. 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 March 31, 2019:
|  | South Africa |  |  |  |
|  | Continuing |  |  | Discontinued |  |  | Total |
|  |  |  |  | June |  |  |  |  |  |  |
|  | Amended |  |  | 2018 |  |  | Other |  |  |  |
|  | July 2017 |  |  | Facility |  |  | (Note 2) |  |  | Total |
Included in current portion of long-term borrowings | $ | 44,079 |  | $ | - |  | $ | 616 |  | $ | 44,695 |
Included in long-term borrowings |  | 5,469 |  |  | - |  |  | - |  |  | 5,469 |
Balance as of June 30, 2018 |  | 49,548 |  |  | - |  |  | 616 |  |  | 50,164 |
Utilized |  | - |  |  | 14,613 |  |  | - |  |  | 14,613 |
Repaid |  | (30,797 | ) |  | (4,944 | ) |  | (569 | ) |  | (36,310 | )
Deconsolidated (Note 2) |  | - |  |  | (10,150 | ) |  | - |  |  | (10,150 | )
Foreign currency adjustment(1) |  | (2,928 | ) |  | 481 |  |  | (47 | ) |  | (2,494 | )
Balance as of March 31, 2019, included in current |  |  |  |  |  |  |  |  |  |  |  |
portion of long-term borrowings | $ | 15,823 |  | $ | - |  | $ | - |  | $ | 15,823 |
(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 March 31, 2019 and 2018, was $0.6 million and $1.9 million, respectively. Interest expense incurred during the nine months ended March 31, 2019 and 2018, was $2.7 million and $5.5 million, respectively. Prepaid facility fees amortized during each of the three months ended March 31, 2019 and 2018, was $0.1 million, respectively. Prepaid facility fees amortized during the nine months ended March 31, 2019 and 2018, was $0.2 million and $0.3 million, respectively. Interest expense incurred in respect of the Company's South Korean debt facilities during the nine months ended March 31, 2018, was $0.4 million. Prepaid facility fees amortized during the three months ended March 31, 2018, was $0.1 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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