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Borrowings | 3 Months Ended
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Sep. 30, 2019
Borrowings [Abstract] |
Borrowings | 9. Borrowings Refer to Note 12 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2019, for additional information regarding its 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 Short-term facility - Facility E On September 26, 2018, Net1 SA further revised its amended July 2017 Facilities agreement with RMB to include an overdraft facility ("Facility E") of up to ZAR 1.5 billion ($106.5 million, translated at exchange rates applicable as of June 30, 2019) to fund the Company's ATMs. The available Facility E overdraft facility was subsequently reduced to ZAR 1.2 billion ($85.2 million) in September 2019. 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. The overdraft facility will be reviewed in September 2020. 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. As at September 30, 2019, the Company had utilized approximately ZAR 0.9 billion ($62.6 million) of this overdraft facility. This ZAR 1.2 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, 2019, was 10.00%. Short-term facility - Facility F On September 4, 2019, Net1 SA further amended its amended July 2017 Facilities agreement with RMB and Nedbank to include an overdraft facility ("Facility F") of up to ZAR 300.0 million ($21.3 million, translated at exchange rates applicable as of September 30, 2019) for the sole purposes of funding the acquisition of airtime from Cell C. Net1 SA may not dispose of the airtime acquired from Cell C prior to April 1, 2020, without the prior consent of RMB, Absa Bank Limited and Investec Asset Management Proprietary Limited. Facility F comprises (i) a first Senior Facility F loan of ZAR 220 million (ii) a second Senior Facility F loan of ZAR 80 million, or such lesser amount as may be agreed by the facility agent. Facility F is required to be repaid in full within nine months following the first utilization of the facility. Net1 SA is required to prepay Facility F subject to customary prepayment terms. Interest on Facility F is based JIBAR plus a margin of 5.50% per annum and is due in full on repayment of the loan. JIBAR was 6.79% on September 30, 2019. The margin on the Facility F will increase by 1% per annum if Net1 SA has not disposed of certain assets by October 31, 2019, and will increase by a further 1% if Net1 SA has not disposed of its shareholding in DNI by January 31, 2020. Net1 SA paid a non-refundable structuring fee of ($0.1 million) ZAR 2.2 million to the Lenders in September 2019, and the Company expensed this amount in full during the first quarter of fiscal 2020. Nedbank facility, comprising short-term facilities As of September 30, 2019, the aggregate amount of the Company's short-term South African credit facility with Nedbank Limited was ZAR 450.0 million ($29.7 million). The credit facility comprises an overdraft facility of (i) up to ZAR 300 million ($19.8 million), which is further split into (a) a ZAR 250.0 million ($16.5 million) overdraft facility which may only be used to fund ATMs used at pay points and (b) a ZAR 50 million ($3.3 million) general banking facility and (ii) indirect and derivative facilities of up to ZAR 150 million ($9.9 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 the Company's ATMs is considered restricted cash. As of September 30, 2019, the Company has utilized approximately ZAR 94.4 million ($6.2 million) of its ZAR 250 million overdraft facility to fund ATMs, and ZAR 53.8 million ($3.6 million) of its ZAR 50 million general banking facility. On October 1, 2019, the Company reduced the amount drawn under the general banking facility to fall within the ZAR 50.0 million limitation. As of September 30, 2019 and June 30, 2019, the Company had utilized approximately ZAR 93.6 million ($6.2 million) and ZAR 93.6 million ($6.6 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). 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 2.09% on September 30, 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 September 30, 2019, the Company had utilized approximately $6.7 million of this facility. South Korea, a short-term facility The Company obtained a one-year KRW 10 billion ($8.6 million) short-term overdraft facility from Hana Bank, a South Korean bank, in January 2019. The interest rate on the facilities is 1.98% plus 3-month CD rate. The CD rate as of September 30, 2019, was 1.55%. The facility expires in January 2020, however it can be renewed. The facility is unsecured with no fixed repayment terms. As of September 30, 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 September 30, 2019, and the movement in the Company's short-term facilities from as of June 30, 2019 to as of September 30, 2019:
|  |  |  |  |  |  |  | United |  |  | South |  |  |
|  | South Africa |  |  | States |  |  | Korea |  |  |
|  | Amended |  |  |  |  |  | Bank |  |  |  |  |  |
|  | July 2017 |  |  | Nedbank |  |  | Frick |  |  | Hana |  | Total |
Short-term facilities as of September 30, 2019: | $ | 79,146 |  | $ | 29,680 |  | $ | 20,000 |  | $ | 8,341 | $ | 137,167 |
Overdraft |  | - |  |  | 3,298 |  |  | 20,000 |  |  | 8,341 |  | 31,639 |
Overdraft restricted as to use for ATM |  |  |  |  |  |  |  |  |  |  |  |  |  |
funding only |  | 79,146 |  |  | 16,489 |  |  | - |  |  | - |  | 95,635 |
Indirect and derivative facilities |  | - |  |  | 9,893 |  |  | - |  |  | - |  | 9,893 |
Movement in utilized overdraft facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2019 |  | 69,566 |  |  | 5,880 |  |  | 9,544 |  |  | - |  | 84,990 |
Utilized |  | 167,160 |  |  | 15,354 |  |  | 1,160 |  |  | - |  | 183,674 |
Repaid |  | (169,802 | ) |  | (11,027 | ) |  | (4,000 | ) |  | - |  | (184,829 | )
Foreign currency adjustment(1) |  | (4,327 | ) |  | (429 | ) |  | - |  |  | - |  | (4,756 | )
Balance as of September 30, 2019(2) |  | 62,597 |  |  | 9,778 |  |  | 6,704 |  |  | - |  | 79,079 |
Restricted as to use for ATM |  |  |  |  |  |  |  |  |  |  |  |  |  |
funding only |  | 62,597 |  |  | 6,226 |  |  | - |  |  | - |  | 68,823 |
No restrictions as to use |  | - |  |  | 3,552 |  |  | 6,704 |  |  | - |  | 10,256 |
Movement in utilized indirect and derivative |  |  |  |  |  |  |  |  |  |  |  |  |  |
facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance as of June 30, 2019 |  | - |  |  | 6,643 |  |  | - |  |  | - |  | 6,643 |
Guarantees cancelled |  | - |  |  | - |  |  | - |  |  | - |  | - |
Utilized |  | - |  |  | - |  |  | - |  |  | - |  | - |
Foreign currency adjustment(1) |  | - |  |  | (473 | ) |  | - |  |  | - |  | (473 | )
Balance as of September 30, 2019 | $ | - |  | $ | 6,170 |  | $ | - |  | $ | - | $ | 6,170 |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Nedbank balance as of September 30, 2019, of $9.8 million comprises the net of total overdraft facilities withdrawn of $24.4 million offset against funds in bank accounts with Nedbank of $14.6 million. Movement in long-term borrowings Summarized below is the movement in the Company's long term borrowing from as of June 30, 2019, to as of September 30, 2019:
|  | South |  |  |  |
|  | Africa |  |  |  |
|  | Amended |  |  |  |
|  | July 2017 |  |  | Total |
Balance as of June 30, 2019, allocated to | $ | - |  | $ | - |
Current portion of long-term borrowings |  | - |  |  | - |
Long-term borrowings |  | - |  |  | - |
Utilized |  | 14,798 |  |  | 14,798 |
Foreign currency adjustment(1) |  | (288 | ) |  | (288 | )
Balance as of September 30, 2019 |  | 14,510 |  |  | 14,510 |
Current portion of long-term borrowings |  | 14,510 |  |  | 14,510 |
Long-term borrowings | $ | - |  | $ | - |
Interest expense incurred under the Company's South African long-term borrowing during the three months ended September 30, 2019 and 2018, was $0.6 million and $1.1 million, respectively. The prepaid facility fees amortization charged included in interest expense during the three months ended September 30, 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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