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Borrowings | 12 Months Ended
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Jun. 30, 2021
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 long-term borrowings (all repaid) and a short-term facility (Facility E) On July 21, 2017, Net1 SA entered into a Common Terms Agreement, Subordination Agreement, Security Cession & Pledge and certain ancillary loan documents (collectively, the “Original Loan Documents”) with RMB, a South African corporate and investment bank, and Nedbank Limited (acting through its Corporate and Investment Banking division), an African corporate and investment bank (collectively, the “Lenders”). Since 201 7, these agreements have been amended to add additional facilities. Facilities A, B, C, D and F have been repaid and cancelled. As of June 30, 2021, the only remaining available facility is an overdraft facility (“Facility E”). Available short-term facility - Facility E On September 26, 2018, Net1 SA further revised its amended July 2017 Facilities agreement with RMB to include Facility E, an overdraft facility of up to ZAR 1.5 billion ($ 104.5 million, translated at exchange rates applicable as of June 30, 2021) to fund the Company’s ATMs. The Facility E overdraft facility was subsequently reduced to ZAR 1.2 billion ($ 83.9 million, translated at exchange rates applicable as of June 30, 2021) in September 2019. On August 2, 2021, Net1 SA and RMB entered into a Letter of Amendment to increase Facility E from ZAR 1.2 billion to ZAR 1.4 billion ($ 97.9 million, translated at exchange rates applicable as of June 30, 2021). Interest on the overdraft facility is payable on the first day of month following utilization of the facility and on the final maturity date based on the South African prime rate. 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 within 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 Net1 SA’s shareholding in Cell C, 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 June 30, 2021, the Company had utilized approximately ZAR 0.2 billion ($ 14.2 million) of this overdraft facility. This 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 June 30, 2021, was 7.00%. Repaid and cancelled facilities - Facility A, B, C, D and F As part of the Original Loan Documents concluded on July 21, 2017, Net1 SA also entered into Senior Facility A Agreement, Senior Facility B Agreement and Senior Facility C Agreement, pursuant to which, among other things, Net1 SA borrowed ZAR 1.25 billion to finance a portion of its investment in Cell C and to fund its on-going working capital requirements. On March 8, 2018, the Company amended its South African long-term facility to include an additional term loan, Facility D, of up to ZAR 210.0 million. All amounts under these facilities were repaid in full during the year ended June 30, 2019. On September 4, 2019, Net1 SA further amended the July 2017 Facilities agreement, which included adding Main Street 1692 (RF) Proprietary Limited (“Debt Guarantor”), a South African company incorporated for the sole purpose of holding collateral for the benefit of the Lenders and acting as debt guarantor. The covenants were also amended and now include customary covenants that require Net1 SA to maintain a specified total asset cover ratio and restrict the ability of Net1 SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities. Net1 also agreed that in the event of any sale of KSNET, Inc., it would deposit a portion of the proceeds in an amount of the USD equivalent of the Facility F loan and the Nedbank general banking facility commitment into a bank account secured in favor of the Debt Guarantor. Net1 SA also entered into a pledge and cession agreement with the Debt Guarantor pursuant to which, among other things, Net1 SA agreed to cede its shareholdings in Cell C, DNI and Net1 FIHRST Holdings (Pty) Ltd to the Debt Guarantor. The shareholdings in DNI and Net 1 FIHRST Holdings (Pty) Ltd were released pursuant to the transactions to dispose of these investments. On September 4, 2019, Net1 SA further amended its amended July 2017 Facilities agreement with RMB and Nedbank to include a facility (“Facility F”) of up to ZAR 300.0 million ($ 17.3 million, translated at exchange rates applicable as of June 30, 2020) for the sole purpose of funding the acquisition of airtime from Cell C. Net1 SA could not dispose of the airtime acquired from Cell C before April 1, 2020, without the prior consent of RMB, Absa Bank Limited and Investec Asset Management Proprietary Limited. Facility F comprised (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. The first loan was utilized on September 5, 2019, while the second loan was never utilized. Facility F was required to be repaid in full within nine months following the first utilization of the facility. Net1 SA was required to prepay Facility F subject to customary prepayment terms. Interest on Facility F was based on JIBAR plus a margin of 5.50 % per annum and was due in full on repayment of the loan. The margin on the Facility F increased by 1% on November 1, 2019, because the Company had not disposed of its remaining shareholding in DNI and FIHRST by that date. 11 . BORROWINGS (continued) South Africa (continued July 2017 Facilities, as amended, comprising long-term borrowings (all repaid) and a short-term facility (Facility E) (continued) Repaid and cancelled facilities - Facility A, B, C, D and F (continued) 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. The Company settled the facility in full on April 1, 2020, utilizing a portion of the proceeds received from the sale of its remaining stake in DNI, and the facility was cancelled. Nedbank facility, comprising short-term facilities As of June 30, 2021, the aggregate amount of the Company’s short-term South African credit facility with Nedbank Limited was ZAR 406.6 million ($ 28.4 million). The credit facility comprises an overdraft facility of up to ZAR 250.0 million ($ 17.5 million), which may only be used to fund mobile ATMs and indirect and derivative facilities of up to ZAR 156.6 million ($ 10.9 million), which include guarantees, letters of credit and forward exchange contracts. On November 2, 2020, the Company amended its short -term South African credit facility with Nedbank Limited to increase the indirect and derivative facilities component of the facility from ZAR 150.0 million to ZAR 159.0 million. On June 1, 2021, the Company further amended its short-term South African credit facility with Nedbank Limited to reduce the indirect and derivative facilities component of the facility from ZAR 159.0 million to ZAR 157.0 million, and to cancel its ZAR 50 million general banking facility. The Company has entered into cession and pledge agreements with Nedbank related to certain of its Nedbank credit facilities (the general banking facility and a portion of the indirect facility) and the Company has ceded and pledged certain bank accounts to Nedbank and also provided a the cession of Net1 SA’s shareholding in Cell C. The funds included in these bank accounts are restricted as they may not be withdrawn without the express permission of Nedbank. These funds, of ZAR 156.6 million ($ 10.9 million translated at exchange rates applicable as of June 30, 2021), are included within the caption restricted cash related to ATM funding and credit facilities on the Company’s consolidated balance sheet as of June 30, 2021. The Company has also ceded all of its 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. 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 June 30, 2021, the Company had total funds of $ 0.2 million in bank accounts with Nedbank which have been set off against $ 0.2 million drawn under the Nedbank facility, for a net utilized facility balance of $ 0 (nil) as of June 30, 2021. As of June 30, 2020, the Company had total funds of $ 12.4 million in bank accounts with Nedbank which have been set off against $ 12.4 million drawn under the Nedbank facility, for a net amount drawn under the facility of $ 0.1 million. As of June 30, 2021, the interest rate on the overdraft facility was 5.85 %. As of June 30, 2021, the Company had not utilized its ZAR 250.0 million overdraft facility to fund ATMs. As of June 30, 2020, the Company had utilized approximately ZAR 1.0 million ($ 0.1 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 June 30, 2021 and June 30, 2020, the Company had utilized approximately ZAR 156.6 million ($ 10.9 million) and ZAR 93.6 million ($ 5.4 million), respectively, of its indirect and derivative facilities of ZAR 156.6 million (2020: 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 facility (this facility has been repaid and cancelled) 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. As of June 30, 2019, the Company had utilized approximately $ 9.5 million of this facility. The Company’s $ 20 million facility from Bank Frick was settled in full and cancelled in March 2020. The facility was secured by a pledge of the Company’s investment in Bank Frick and the shares under the pledge were released upon cancellation . 11 . BORROWINGS (continued) Movement in short-term credit facilities Summarized below are the Company’s short -term facilities as of June 30, 2021, and the movement in the Company’s short-term facilities from as of June 30, 2020 to as of June 30, 2021: South Africa United States Amended July 2017 Nedbank Bank Frick Total Short-term facilities available as of June 30, 2021 $ 83,910 $ 28,428 $ 112,338 Overdraft restricted as to use for ATM funding only 83,910 17,481 101,391 Indirect and derivative facilities - 10,947 10,947 Movement in utilized overdraft facilities: Balance as of June 30, 2019 69,566 5,880 $ 9,544 84,990 Utilized 603,134 69,245 17,384 689,763 Repaid (647,990) (73,017) (26,928) (747,935) Foreign currency adjustment (1) (9,954) (2,050) - (12,004) Balance as of June 30, 2020 (2) 14,756 58 - 14,814 Restricted as to use for ATM funding only 14,756 58 14,814 No restrictions as to use - - - Utilized 340,655 19,428 360,083 Repaid (346,187) (19,253) (365,440) Foreign currency adjustment (1) 5,021 (233) 4,788 Balance as of June 30, 2021 (3) 14,245 - 14,245 Restricted as to use for ATM funding only 14,245 - 14,245 Movement in utilized indirect and derivative facilities: Balance as of June 30, 2019 - 6,643 - 6,643 Foreign currency adjustment (1) - (1,245) - (1,245) Balance as of June 30, 2020 - 5,398 - 5,398 Utilized - 4,009 - 4,009 Foreign currency adjustment (1) - 1,540 - 1,540 Balance as of June 30, 2021 $ - $ 10,947 $ - $ 10,947 (1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) As of June 30, 2020, there were no amounts offset against the Nedbank overdraft facilities. (3) As of June 30, 2021, there was $ 0.2 million offset against the Nedbank overdraft facilities. Movement in long-term borrowings The Company had no long-term borrowings as of June 30, 2021. Summarized below is the movement in the Company’s long- term borrowing from as of June 30, 2019, to as of June 30, 2020: South Africa Amended July 2017 Total Balance as of July 1, 2019 $ - $ - Utilized 14,798 14,798 Repaid from sale of DNI shares (Note 8) (14,503) (14,503) Foreign currency adjustment (1) (295) (295) Balance as of June 30, 2020 $ - $ - (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 years ended June 30, 2020 and 2019, was $ 0.6 million and $ 2.9 million, respectively. There was no prepaid facility fee amortization during the year ended June 30, 2020. Prepaid facility fees amortized during the years ended June 30, 2019, was $ 0.3 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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