XML 50 R30.htm IDEA: XBRL DOCUMENT
v3.21.2

Acquisitions And Dispositions | 12 Months Ended
--- | ---
Jun. 30, 2021
Acquisition And Dispositions [Abstract] |
Acquisition And Dispositions | 23. ACQUISITIONS AND DISPOSITIONS Acquisitions The Company did not make any acquisitions during the years ended June 30, 2021, 2020 and 2019. Dispositions 2020 Dispositions March 2020 disposal of KSNET On January 23, 2020, the Company, through its wholly owned subsidiary Net1 Applied Technologies Netherlands B.V. (“Net1 BV”), a limited liability private company incorporated in The Netherlands, entered into an agreement with PayletterHoldings LLC, a limited liability private company incorporated in the Republic of Korea, in terms of which Net1 BV agreed to sell its entire shareholding in Net1 Applied Technologies Korea Limited (“Net1 Korea”), a limited liability private company incorporated in the Republic of Korea and the sole shareholder of KSNET, Inc. for $ 237.2 million. The transaction was subject to customary closing conditions and closed on March 9, 2020. The Company no longer controls Net1 Korea and its subsidiaries and deconsolidated its investment effective March 1, 2020, and had no continued involvement going forward. KSNET was acquired in October 2010, and was a profitable and cash generative business, but operated autonomously and in a more developed economy, with limited overlap with the Company’s other activities. The Company also believe d that the intrinsic value of KSNET was not appropriately reflected in the Company’s overall valuation. The Company’s board of directors commenced a strategic review of its various businesses and investments during calendar 2019, and ultimately evaluated and decided to sell KSNET in January 2020 in order to focus more on the Company’s core strategy, boost liquidity and to maximize shareholder returns. 23. ACQUISITIONS AND DISPOSITIONS (continued) Dispositions (continued) 2020 Dispositions (continued) March 2020 disposal of KSNET (continued) The table below presents the impact of the deconsolidation of Net1 Korea and its subsidiaries and the calculation of the net gain recognized on deconsolidation: Net1 Korea March 2020 Proceeds from disposal of Net1 Korea, net of cash disposed $ 192,619 Add: Cash and cash equivalents disposed 23,473 Add: Cash withheld by purchaser to settle South Korean taxes (1) 21,128 Fair value of consideration received 237,220 Less: carrying value of Net1 Korea, comprising 200,843 Cash and cash equivalents 23,473 Accounts receivable, net 30,467 Finance loans receivable, net 13,695 Inventory 2,377 Property, plant and equipment, net 7,601 Operating lease right of use asset 181 Goodwill (Note 9) 107,964 Intangible assets, net 4,655 Deferred income taxes assets 1,719 Other long-term assets 10,984 Accounts payable (5,484) Other payables (5,523) Operating lease liability - current (69) Income taxes payable (3,481) Deferred income taxes liabilities (1,497) Operating lease liability – long-term (112) Other long-term liabilities (335) Released from accumulated other comprehensive income – foreign currency translation reserve (Note 14) 14,228 Settlement assets 44,111 Settlement liabilities (44,111) Gain recognized on disposal, before transaction costs and tax 36,377 Transaction costs (2) 8,644 Gain recognized on disposal, before tax 27,733 Taxes related to gain recognized on disposal (1) 15,279 Gain recognized on disposal, after tax $ 12,454 (1) Represents taxes paid related to the disposal of Net1 Korea (refer to Note 17). The Company also agreed that the purchaser withhold potential capital gains taxes of $ 19.9 million (approximately KRW 23.8 billion) and non-refundable securities transaction taxes of $ 1.2 million (approximately KRW 1.4 billion), for a total withholding of $ 21.1 million, from the purchase price and pay such amounts, on behalf of Net1 BV, to the South Korean tax authorities. Net1 BV commenced a process to claim a refund from the South Korean tax authorities of the potential amount withheld and received this amount of approximately $ 20.1 million (KRW 23.8 billion) in September 2020. The Company included the expected amount to be refunded in the caption Accounts receivable, net and other receivables in its consolidated balance sheet as of June 30, 2020, refer also to Note 3. (2) Transaction costs include expenses incurred by the Company of $ 7.5 million directly related to the disposal of Net1 Korea and paid in cash and a non-refundable securities transfer tax of approximately $ 1.2 million which was also withheld from the purchase price and paid to the South Korean tax authorities directly by the purchaser. 23. ACQUISITIONS AND DISPOSITIONS (continued) Dispositions (continued) 2020 Dispositions (continued) December 2019 disposal of FIHRST In November 2019, the Company through its wholly owned subsidiary, Net1 Applied Technologies South Africa Proprietary Limited (“Net1 SA”), entered into an agreement with Transaction Capital Payment Solutions Proprietary Limited, or its nominee, a limited liability private company incorporated in the Republic of South Africa, pursuant to which Net1 SA agreed to sell its entire shareholding in Net1 FIHRST Holdings Proprietary Limited (“FIHRST”) for $ 10.9 million (ZAR 159.7 million). The transaction closed in December 2019. FIHRST was deconsolidated following the closing of the transaction. Net1 SA was obliged to utilize the full purchase price received from the sale of FIHRST to partially settle its obligations under its lending arrangements and applied the proceeds received against its outstanding borrowings – refer to Note 11 . The table below presents the impact of the deconsolidation of FIHRST and the calculation of the net gain recognized on deconsolidation: FIHRST December 31, 2019 Proceeds from disposal of FIHRST, net of cash disposed $ 10,895 Add: Cash and cash equivalents disposed 854 Fair value of consideration received 11,749 Less: carrying value of FIHRST, comprising 1,870 Cash and cash equivalents 854 Accounts receivable, net 367 Property, plant and equipment, net 64 Goodwill (Note 9) 599 Intangible assets, net 30 Deferred income taxes assets 42 Accounts payable (7) Other payables (1,437) Income taxes payable (220) Released from accumulated other comprehensive income – foreign currency translation reserve (Note 14) 1,578 Settlement assets 17,406 Settlement liabilities (17,406) Gain recognized on disposal, before tax 9,879 Taxes related to gain recognized on disposal, comprising: - Capital gains tax 2,654 Release of valuation allowance related to capital losses previously unutilized (1) (2,654) Transaction costs 136 Gain recognized on disposal, after tax $ 9,743 (1) Net1 SA recorded a valuation allowance related to capital losses previously generated but not utilized. A portion of these unutilized capital losses was utilized as a result of the disposal of FIHRST and, therefore, the equivalent portion of the valuation allowance created was released. May 2020 deconsolidation of CPS On February 5, 2020, the Constitutional Court of South Africa denied CPS’ leave to appeal lower court judgments ordering CPS to repay additional implementation costs that SASSA paid to CPS in 2014, thereby exhausting all legal recourse for CPS in the matter. As a result, CPS’ board of directors adopted a resolution to put CPS into business rescue under South African law and filed the required resolution with the Companies and Intellectual Property Commission. On May 18, 2020, the resolution was officially registered and business rescue practitioners were appointed. The business rescue process could have led to either a compromise with creditors and a continuation of CPS’ business or the liquidation of CPS. The Company had no means of exercising any control over CPS or the business rescue process because the Company has ceded control of CPS to the business rescue practitioners on the commencement of the business rescue process. The business rescue practitioners are independent third parties and controlled CPS through the business rescue process. The Company no longer controls CPS and therefore it determined to deconsolidate CPS. 23. ACQUISITIONS AND DISPOSITIONS (continued) Dispositions (continued) 2020 Dispositions (continued) May 2020 deconsolidation of CPS (continued) As a practical matter, the Company deconsolidated CPS as of May 31, 2020. The Company does not believe that the utilization of this date, compared to May 18, 2020, has had a significant impact on its consolidated financial statements. On March 26, 2020, CPS’ holding company, Net1 SA, submitted a filing to Gauteng Division of the High Court of South Africa (“High Court”) under which it commenced a process to place CPS into business rescue due to administrative delays experienced in the CPS business rescue application process. Net1 SA proposed in its March 2020 High Court filing that it was willing to contribute ZAR 50.0 million ($ 2.9 million translated at exchange rates applicable as of June 30, 2020) into CPS if CPS and SASSA reached a settlement on their claims and counterclaims. Given that SASSA was contesting the CPS business rescue process (refer below), the Company did not believe that it, through Net1 SA, would be required to make the investment of ZAR 50.0 million and therefore it did not recorded a liability as of June 30, 2020. On June 18, 2020, SASSA launched an urgent application with the High Court to place CPS into liquidation and declare the business rescue process invalid. On July 7, 2020, the business rescue practitioners, on behalf of CPS, responded to this application correcting a number of inaccuracies contained therein. The matter was heard on October 16, 2020, and the High Court ordered that CPS be placed into liquidation. The Company provided accounting, tax and general administrative services to CPS while it was in business rescue and continues to provide these services during the liquidation process. In addition, the Company had an arrangement with CPS to rent certain bespoke payment vehicles from CPS, and it was expected that this arrangement would continue while CPS was in business rescue. These vehicles largely comprise the fleet of customized mobile ATMs used to deliver a service to rural communities. The value of these arrangements was not significant and was determined on an arms-length basis. On October 15, 2020, the Company purchased the bespoke vehicles from CPS for an arms-length price of ZAR 50.0 million (approximately $ 3.0 million, translated at the applicable exchange rate) to use in its mobile ATM business. The table below presents the impact of the deconsolidation of CPS and the calculation of the net loss recognized on deconsolidation: CPS May 2020 Fair value of consideration received $ - Less: carrying value of CPS, comprising (68) Cash and cash equivalents 328 Accounts receivable, net 303 Inventory 12 Property, plant and equipment, net 236 Goodwill (Note 9) - Deferred income taxes assets (Note 17) - Accounts payable (238) Other payables (33,160) Released from accumulated other comprehensive income – foreign currency translation reserve (Note 14) 32,451 Gain recognized on deconsolidation, before tax 68 Intercompany accounts written off/ provided for (1) 7,216 Taxes related to loss recognized on deconsolidation, comprising: - Capital loss generated upon deconsolidation (2) 5,399 Valuation allowance related to capital losses generated upon deconsolidation (2) (5,399) Loss recognized on deconsolidation, after tax $ 7,148 (1) Certain of the Company’s subsidiaries had funds due from CPS as of May 31, 2020. The Company wrote these amounts off as it did not believe that they were recoverable. (2) The Company recorded a deferred tax asset related to the capital loss generated on deconsolidation of CPS. The Company is only able to claim the capital loss for South African capital gains tax purposes once it deregisters or disposes of its interest in CPS. The Company has recorded a valuation allowance related to the full CPS capital loss deferred tax asset recognized because it does not believe that this capital loss will be utilized in the foreseeable future. 23. ACQUISITIONS AND DISPOSITIONS (continued) Dispositions (continued) 2019 Dispositions March 2019 disposal of DNI On February 28, 2019, the Company through its wholly owned subsidiary, Net1 Applied Technologies South Africa Proprietary Limited (“Net1 SA”), entered into a transaction with JAA Holdings Proprietary Limited, a limited liability private company duly incorporated in the Republic of South Africa, and PK Gain Investment Holdings Proprietary Limited, a limited liability private company duly incorporated in the Republic of South Africa, in terms of which Net1 SA reduced its shareholding in DNI from 55 % to 38 %. The transaction closed on March 31, 2019. The parties used a cashless settlement process on closing, refer to Note 19 . Net1 SA used the proceeds from the sale of the DNI shares to settle its ZAR 400 million ($ 27.6 million, translated at exchange rates applicable as of March 31, 2019), obligation to DNI to subscribe for an additional share as part of the contingent consideration settlement process. The Company no longer controlled DNI and deconsolidated its investment in DNI effective March 31, 2019. The table below presents the impact of the deconsolidation of DNI and the calculation of the net loss recognized on deconsolidation: DNI Equity method investment as of June 30, 2019 Total 17% sold 8% retained interest sold in May 2019 30% retained interest Attributed to non- controlling interest Fair value of consideration received $ 27,626 $ 27,626 $ - $ - $ - Fair value of retained interest in DNI (1) 74,195 - 14,849 59,346 - Carrying value of non-controlling interest 88,934 - - - 88,934 Subtotal 190,755 27,626 14,849 59,346 88,934 Less: carrying value of DNI, comprising 199,930 38,346 14,540 58,110 88,934 Cash and cash equivalents 2,114 354 158 633 969 Accounts receivable, net 24,577 4,116 1,841 7,358 11,262 Finance loans receivable, net 1,030 173 77 308 472 Inventory 893 149 66 268 410 Property, plant and equipment, net 1,265 212 95 379 579 Equity-accounted investments 242 41 19 72 110 Goodwill 113,003 18,924 8,466 33,834 51,779 Intangible assets, net 80,769 13,526 6,051 24,183 37,009 Deferred income taxes 28 5 2 8 13 Other long-term assets 26,553 4,447 1,989 7,950 12,167 Accounts payable (5,186) (868) (389) (1,553) (2,376) Other payables (2) (16,484) (2,760) (1,235) (4,936) (7,553) Income taxes payable (2,482) (416) (186) (743) (1,137) Deferred income taxes (22,083) (3,698) (1,654) (6,612) (10,119) Long-term debt (10,150) (1,700) (760) (3,039) (4,651) Released from accumulated other comprehensive income – foreign currency translation reserve (Note 14) 5,841 5,841 - - - Loss recognized on disposal, before tax, comprising (9,175) (10,720) 309 1,236 - Related to sale of 17 % of DNI (10,720) (10,720) - - Related to fair value adjustment of retained interest in 38 % of DNI 1,545 - 309 1,236 Taxes related to gain recognized on disposal (3) - 505 (3,836) 3,331 Loss recognized on disposal of discontinued operation, after tax $ (9,175) $ (11,225) $ 4,145 $ (2,095) 23. ACQUISITIONS AND DISPOSITIONS (continued) Dispositions (continued) 2019 Dispositions March 2019 disposal of DNI (continued) (1) The fair value of the retained interest in 38 % of DNI of $ 74.2 million ($ 14.9 million plus $ 59.3 million) was calculated using the implied fair value of DNI pursuant to the RMB Disposal and was calculated as ZAR 215.0 million divided by 7.605235 % multiplied by 38 %, translated to dollars at the March 31, 2019, rate of exchange. (2) Other payables include a short-term loan of ZAR 60.5 million ($ 4.3 million, translated at exchange rates applicable as of June 30, 2019) due to the Company. The short-term loan is included in accounts receivable, net and other receivables on the Company’s consolidated balance sheet as of June 30, 2019, and was repaid in full on July 31, 2019. Interest on the loan was charged at the South African prime rate. (3) Amounts presented are net of a valuation allowance provided. The disposal of DNI resulted in a capital loss for tax purposes of approximately $ 1.5 million and the Company provided a valuation allowance of $ 1.5 million against this capital loss because it did not have any capital gains to offset against this amount at the time. On an individual basis, the transaction to dispose of 17 % of DNI resulted in a capital gain of $ 0.5 million and the re-measurement of the retained 38 % interest has resulted in a capital loss of $ 2.0 million ($ 5.3 million (8% transaction) less $ 3.3 million (30% transaction)). The valuation allowance of $ 1.5 million was provided against the $ 5.3 million, for a net amount presented in the table above of $ 3.8 million ($ 5.3 million less $ 1.5 million).

X
- Definition The entire disclosure for a business combination (or series of individually immaterial business combinations) completed during the period, including background, timing, and recognized assets and liabilities. The disclosure may include leverage buyout transactions (as applicable). + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 805 -URI http://asc.fasb.org/topic&trid=2303972 + Details
Name: | us-gaap_BusinessCombinationDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- References No definition available. + Details
Name: | us-gaap_BusinessCombinationsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration