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Borrowings | 6 Months Ended
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Dec. 31, 2019
Borrowings [Abstract] |
Borrowings | 10. Borrowings Refer to No te 12 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended Ju ne 30, 201 9, 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 ($106.8 m illion, translated at exchange rates applicable as of December 31, 2019) to fund the Company’s ATMs. The available Facility E overdraft facility was subsequently reduced to ZAR 1,2 billion ($85,4 million, translated at exchange rates applicable as of December 31, 2019) 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 the South African prime rate. The overdr aft 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 pledg e 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 again st Grindrod Bank Limited. As at December 31, 2019, the Company had utilized approximately ZAR 1,0 billion ($72,7 million) of this overdraft facility. This ZAR 1,2 billion overdraft facility may only be us ed 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 December 31, 2019, was 10,00% and reduced to 9,75% on January 17, 2020, following a reduction in the South African repo rate. Long-term borrowings 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 (“Fac ility F”) of up to ZAR 300,0 million ($21,4 million, translated at exchange rates applicable as of December 31, 2019) for the sole purpose of funding the acquisition of airtime from Cell C. Net1 SA may not dispose of the airt ime 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 220,0 million (ii) a second Senior Facility F loan of ZAR 80,0 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. N et1 SA is required to prepay Facility F subject to customary prepayment terms. Interest on Facility F is based on JIBAR plus a margin of 5,50% per annum and is due in full on repayment of the loan. JIBAR was 6,80% on December 31, 2019. The margin on the Facility F increased by 1% on November 1, 2019, because we had not disposed of our remaining shareholding in DNI and FIHRST by that date. Net1 SA paid a non-refundable structuring fee of ZAR 2.2 million ($0.1 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 faciliti es As of December 31, 2019, the aggregate amount of the Company’s short-term South African credit facility with Nedbank Limited was ZAR 450,0 million ($32,0 million). The credit facility comprises an overdraft facility of (i) up to ZAR 300,0 million ($21,4 million), which is further split into (a) a ZAR 250,0 million ($17,8 million) overdraft facility which may only be used to fund mobile ATMs and (b) a ZAR 50,0 million ($3,6 million) general banking facility and (ii) indirect and derivative facilities of up to ZAR 150,0 million ($10,7 million), which include letters of guarantees, letters of credit and forward e xchange 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. 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 December 31, 2019, the Company had total funds of $2,7 million in bank accounts with Nedbank which have been set off against $14,4 million drawn under the Nedbank facility, for a net amount drawn under the facility of $11,7 million. As of December 31, 2019, the interest rate on the overdraft facility was 8,85%, and reduced to 8,60% on January 17, 2020, following a reduction in the South African repo rate. As of December 31, 2019, the Com pany ha d utilized approximately ZAR 164,3 million ($11,7 million) of its ZAR 300,0 million overdraft facility to fund ATMs, and none of its ZAR 50,0 million general banking facility. As of December 31, 2019 and June 30, 2019, the Company had utilized approximately ZAR 93,6 million ($6,7 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 21). United States, a short-term fac ility 10. Borrowings (continued) 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 1,91% on December 31, 2019. The facility has no fixed term, however, it may be terminated by either p arty with six weeks written notice. The facility is secured by a pledge of the Company’s investment in Bank Frick. As of December 31, 2019, the Company had utilized approximately $13,9 million of this facility. South Korea, a short-t erm facility The Company obtained a one year KRW 10,0 billion ($8,7 million) short-term overdraft facility from Hana Bank, a South Korean bank, in January 2019. The interest rate on the facilit y is 1,98% plus the 3-month CD rate. The CD rate as of December 31, 2019 was 1,53%. The facility expires in January 202 1, however can be renewed. The facility is unsecured with no fixed repayment terms. As of December 31, 2019, the Company had not utilized this facility. Movement in short-term credit facilities Summarized below are t he Company’s short-term facilities as of December 31, 2019, and the movement in the Company’s short-term facilities from as of June 30, 2019 to as of December 31, 2019
|  |  |  |  |  |  | South Africa |  |  | United States |  |  | South Korea |  |  | Total |
|  |  |  |  |  |  | Amended July 2017 |  |  | Nedbank |  |  | Bank Frick |  |  | Hana |  |  |  |
| Short-term facilities available as of |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| December 31, 2019 | $ | 85 419 |  | $ | 32 032 |  | $ | 20 000 |  | $ | 8 654 |  | $ | 146 105 |
|  | Overdraft |  | - |  |  | 3 559 |  |  | 20 000 |  |  | 8 654 |  |  | 32 213 |
|  | Overdraft restricted as to use for ATM funding only |  | 85 419 |  |  | 17 796 |  |  | - |  |  | - |  |  | 103 215 |
|  | Indirect and derivative facilities |  | - |  |  | 10 677 |  |  | - |  |  | - |  |  | 10 677 |
| Movement in utilized overdraft facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Balance as of June 30, 2019 |  | 69 566 |  |  | 5 880 |  |  | 9 544 |  |  | - |  |  | 84 990 |
|  |  | Utilized |  | 349 466 |  |  | 33 722 |  |  | 8 362 |  |  | - |  |  | 391 550 |
|  |  | Repaid |  | (346 525) |  |  | (28 029) |  |  | (4 000) |  |  | - |  |  | (378 554) |
|  |  | Foreign currency adjustment(1) |  | 157 |  |  | 123 |  |  | - |  |  | - |  |  | 280 |
|  |  |  | Balance as of December 31, 2019(2) |  | 72 664 |  |  | 11 696 |  |  | 13 906 |  |  | - |  |  | 98 266 |
|  |  |  |  | Restricted as to use for ATM funding only |  | 72 664 |  |  | 11 696 |  |  | - |  |  | - |  |  | 84 360 |
|  |  |  |  | No restrictions as to use |  | - |  |  | - |  |  | 13 906 |  |  | - |  |  | 13 906 |
| Movement in utilized i ndirect and derivative |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Balance as of June 30, 2019 |  | - |  |  | 6 643 |  |  | - |  |  | - |  |  | 6 643 |
|  |  | Foreign currency adjustment(1) |  | - |  |  | 17 |  |  | - |  |  | - |  |  | 17 |
|  |  |  | Balance as of December 31, 2019 | $ | - |  | $ | 6 660 |  | $ | - |  | $ | - |  | $ | 6 660 |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Nedbank balance as of December 31, 2019, of $11.7 million comprises the net of total overdraft facilities withdrawn of $14.4 million offset against funds in bank accounts with Nedbank of $2.7 million. Movement in long-term borrowings Summarized below is the movement in the Company’s long term borrowing from as of June 30, 2019 and December 31, 2019:
|  |  |  |  |  |  |  |  |  | South Africa |  |  |  |
|  |  |  |  |  |  |  |  |  | Amended July 2017 |  |  | Total |
| Balance as of June 30, 2019 |  |  |  |  |  |  | $ | - |  | $ | - |
| Current portion of long-term borrowings |  |  |  |  |  |  |  | - |  |  | - |
| Long-term borrowings |  |  |  |  |  |  |  | - |  |  | - |
|  | Utilized |  |  |  |  |  |  |  | 14 798 |  |  | 14 798 |
|  | Repaid |  |  |  |  |  |  |  | (11 313) |  |  | (11 313) |
|  | Foreign currency adjustment(1) |  |  |  |  |  |  |  | 578 |  |  | 578 |
| Balance as of December 31, 2019 |  |  |  |  |  |  |  | 4 063 |  |  | 4 063 |
|  | Current portion of long-term borrowings |  |  |  |  |  |  |  | 4 063 |  |  | 4 063 |
|  | Long-term borrowings |  |  |  |  |  |  | $ | - |  | $ | - |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. Interest expense incurred under the Company’s South African long-term borrowing during the three months ended December 31, 2019 and 2018, was $0,4 million and $0,9 million, respectively. Interest expense inc urred during the six months ended December 31, 2019 and 2018, was $0,6 million and $2,1 million, respectively. There were no prepaid facility fee amortization during the three and six months ended December 31, 2019. Prepaid facility fees amortized during the three and six months ended December 31, 2018, was $0,1 million and $0,2 million, respectively.

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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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