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v3.22.4

Borrowings | 6 Months Ended
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Dec. 31, 2022
Borrowings [Abstract] |
Borrowings | 8. 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, 2022, for additional information regarding its borrowings. South Africa The amounts below have been translated at exchange rates applicable as of the dates specified. RMB Facilities, as amended, comprising a short-term facility (Facility E) and long-term borrowings Long-term borrowings - Facility G and Facility H On December 29, 2022, the Company, through Lesaka Technologies (Pty) Ltd, entered into an Amendment Agreement (the “Amendment Agreement”), with FirstRand Bank Limited, acting through its Rand Merchant Bank division (“RMB”), which amends its Senior Facility G Agreement and its Senior Facility H Agreement. Pursuant to the Amendment Agreement, the Senior Facility G Agreement was amended to (i) extend the final maturity date by approximately two years and eight months to December 31, 2025, (ii) delete the definitions of Trigger Event and Trigger Event Date and (iii) delete the clause (clause 12) regarding the operation of any trigger event. The Senior Facility H Agreement was amended to extend the final maturity date by approximately two years and eight months to December 31, 2025. Interest on Facility G and H is payable quarterly in arrears, however, RMB agreed to a delay in the payment of interest for the three months ended December 31, 2022, in order to support the Company’s liquidity position. Available short-term facility - Facility E As of December 31, 2022, the aggregate amount of the Company’s short-term South African overdraft facility with RMB was ZAR 1.4 billion ($82.3 million). As of December 31, 2022, the Company had utilized approximately ZAR 0.9 billion ($54.3 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 interest rate on this facility is equal to the prime rate. The prime rate on December 31, 2022, was 10.50%, and increased to 10.75% on January 27, 2023, following an increase in the South African repo rate. Connect Facilities, comprising long-term borrowings and a short-term facility As of December 31, 2022, the Connect Facilities include (i) an overdraft facility (general banking facility) of ZAR 205.0 million (of which ZAR 180.0 million has been utilized); (ii) Facility A of ZAR 700.0 million; (iii) Facility B of ZAR 350.0 million (both fully utilized); and (iv) an asset-backed facility of ZAR 200.0 million (of which ZAR 117.6 million has been utilized). K2020 facility, comprising long-term borrowings The Company, through K2020 Connect (Pty) Limited (“K2020”), an indirect South African subsidiary, entered into a revolving credit facility agreement with RMB on February 15, 2021. The revolving credit facility was for an amount of ZAR 150.0 million and matured on August 12, 2022, and has been replaced with the facility described below. The facility continued to operate normally in agreement with K2020’s lender after maturity, while the parties concluded the legal agreements to significantly increase and extend the facility. Interest on the revolving credit facility was payable quarterly in arrears based on the prime rate in effect from time to time plus a margin. A commitment fee of 1.5% per annum was charged on the undrawn available facility amount. On November 29, 2022, the Company, through its indirect South African subsidiary Cash Connect Capital (Pty) Limited (“CCC”), entered into a Revolving Credit Facility Agreement (the “Loan Document”) with RMB and other Company subsidiaries within the Connect Group of companies listed therein, as guarantors. The transaction closed on December 1, 2022. The Loan Document contains customary covenants that require CCC and K2020 to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities. Pursuant to the Loan Document, CCC may borrow up to an aggregate of ZAR 300.0 million (“Revolving Credit Facility”) for the sole purposes of funding CCC’s consumer lending business, providing a limited recourse loan to K2020, settling up to ZAR 35.0 million related to an intercompany loan to CCC’s direct parent, and paying the structuring and execution fee and legal costs. The Revolving Credit Facility replaces K2020’s existing lending arrangement and increases the borrowings available to facilitate further growth of the business. Interest on the Revolving Credit Facility is payable on the last business day of each calendar month and is based on the South African prime rate in effect from time to time plus a margin of 0.95% per annum. The Company paid a non-refundable structuring and execution fee of ZAR 1.7 million, or $0.1 million, including value added taxation, to the Lenders on closing. 8. Borrowings (continued) South Africa (continued) RMB facility, comprising indirect facilities As of December 31, 2022, the aggregate amount of the Company’s short-term South African indirect credit facility with RMB was ZAR 135.0 million ($7.9 million), which includes facilities for guarantees, letters of credit and forward exchange contracts. As of December 31, 2022 and June 30, 2022, the Company had utilized approximately ZAR 33.1 million ($1.9 million) and ZAR 5.1 million ($0.3 million), respectively, of its indirect and derivative facilities of ZAR 135.0 million (June 30, 2022: ZAR 135.0 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19). Nedbank facility, comprising short-term facilities As of December 31, 2022, the aggregate amount of the Company’s short-term South African credit facility with Nedbank Limited was ZAR 156.6 million ($9.2 million). The credit facility represents indirect and derivative facilities of up to ZAR 156.6 million ($9.2 million), which include guarantees, letters of credit and forward exchange contracts. As of December 31, 2022 and June 30, 2022, the Company had utilized approximately ZAR 2.1 million ($0.1 million) and ZAR 92.1 million ($5.7 million), respectively, of its indirect and derivative facilities of ZAR 156.6 million (June 30, 2022: ZAR 156.6 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19). Movement in short-term credit facilities Summarized below are the Company’s short-term facilities as of December 31, 2022, and the movement in the Company’s short-term facilities from as of June 30, 2022 to as of December 31, 2022:
|  |  |  |  |  | RMB |  | RMB |  | RMB |  | Nedbank |  |  |
|  |  |  |  |  | Facility E |  | Indirect |  | Connect |  | Facilities |  | Total
| Short-term facilities available as of December 31, 2022 | $ | 82,251 |  | $ | 7,931 |  | $ | 12,044 |  | $ | 9,198 |  | $ | 111,424
|  | Overdraft |  | - |  |  | - |  |  | 12,044 |  |  | - |  |  | 12,044
|  | Overdraft restricted as to use for ATM funding only |  | 82,251 |  |  | - |  |  | - |  |  | - |  |  | 82,251
|  | Indirect and derivative facilities |  | - |  |  | 7,931 |  |  | - |  |  | 9,198 |  |  | 17,129
| Movement in utilized overdraft facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Restricted as to use for ATM funding only |  | 51,338 |  |  | - |  |  | - |  |  | - |  |  | 51,338
|  | No restrictions as to use |  | - |  |  | - |  |  | 14,880 |  |  | - |  |  | 14,880
|  |  | Balance as of June 30, 2022 |  | 51,338 |  |  | - |  |  | 14,880 |  |  | - |  |  | 66,218
|  |  |  | Utilized |  | 312,721 |  |  | - |  |  | 571 |  |  | - |  |  | 313,292
|  |  |  | Repaid |  | (308,064) |  |  | - |  |  | (4,238) |  |  | - |  |  | (312,302)
|  |  |  | Foreign currency adjustment(1) |  | (1,745) |  |  | - |  |  | (638) |  |  | - |  |  | (2,383)
|  | Balance as of December 31, 2022 |  | 54,250 |  |  | - |  |  | 10,575 |  |  | - |  |  | 64,825
|  |  |  | Restricted as to use for ATM funding only |  | 54,250 |  |  | - |  |  | - |  |  | - |  |  | 54,250
|  |  |  | No restrictions as to use | $ | - |  | $ | - |  | $ | 10,575 |  | $ | - |  | $ | 10,575
|  | Interest rate as of December 31, 2022 (%)(2) |  | 10.50 |  |  |  |  |  | 10.40 |  |  | - |  |  |
| Movement in utilized indirect and derivative facilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Balance as of June 30, 2022 | $ | - |  | $ | 313 |  | $ | - |  | $ | 5,654 |  | $ | 5,967
|  |  | Guarantees cancelled |  | - |  |  | - |  |  | - |  |  | (5,218) |  |  | (5,218)
|  |  | Utilized |  | - |  |  | 1,623 |  |  | - |  |  | - |  |  | 1,623
|  |  | Foreign currency adjustment(1) |  | - |  |  | 9 |  |  | - |  |  | (312) |  |  | (303)
|  | Balance as of December 31, 2022 | $ | - |  | $ | 1,945 |  | $ | - |  | $ | 124 |  | $ | 2,069
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Facility E interest set at prime and the Connect facility at prime less 0.10%. 8. Borrowings (continued) Movement in long-term borrowings Summarized below is the movement in the Company’s long-term borrowing from as of as of June 30, 2022 to as of December 31, 2022:
|  |  |  |  | Facilities |  |  |
|  |  |  |  | G & H |  | A&B |  | K2020 |  | Asset backed |  | Total
| Included in current | $ | - |  | $ | 4,604 |  | $ | - |  | $ | 2,200 |  | $ | 6,804
| Included in long-term |  | 63,354 |  |  | 59,868 |  |  | 8,346 |  |  | 3,274 |  |  | 134,842
| Opening balance as of June 30, 2022 |  | 63,354 |  |  | 64,472 |  |  | 8,346 |  |  | 5,474 |  |  | 141,646
|  | Facilities utilized |  | - |  |  | - |  |  | 7,377 |  |  | 2,765 |  |  | 10,142
|  | Facilities repaid |  | - |  |  | (2,151) |  |  | - |  |  | (1,117) |  |  | (3,268)
|  | Non-refundable fees paid |  | - |  |  | - |  |  | (100) |  |  | - |  |  | (100)
|  | Non-refundable fees amortized |  | 393 |  |  | 31 |  |  | 20 |  |  | - |  |  | 444
|  | Foreign currency adjustment(1) |  | (2,713) |  |  | (2,818) |  |  | (257) |  |  | (211) |  |  | (5,999)
|  |  | Closing balance as of December 31, 2022 |  | 61,034 |  |  | 59,534 |  |  | 15,386 |  |  | 6,911 |  |  | 142,865
|  |  | Included in current |  | - |  |  | 4,406 |  |  | - |  |  | 3,019 |  |  | 7,425
|  |  | Included in long-term |  | 61,034 |  |  | 55,128 |  |  | 15,386 |  |  | 3,892 |  |  | 135,440
|  |  |  | Unamortized fees |  | (535) |  |  | (276) |  |  | (97) |  |  | - |  |  | (908)
|  |  |  | Due within 2 years |  | - |  |  | 5,141 |  |  | 15,483 |  |  | 2,464 |  |  | 23,088
|  |  |  | Due within 3 years |  | 61,569 |  |  | 6,609 |  |  | - |  |  | 1,360 |  |  | 69,538
|  |  |  | Due within 4 years |  | - |  |  | 5,876 |  |  | - |  |  | 68 |  |  | 5,944
|  |  |  | Due within 5 years | $ | - |  | $ | 37,778 |  | $ | - |  | $ | - |  | $ | 37,778
| Interest rates as of December 31, 2022 (%): |  | 9.3 - 10.3 |  |  | 11.01 |  |  | 11.45 |  |  | 11.25 |  |  |
|  | Base rate (%) |  | 7.26 |  |  | 7.26 |  |  | 10.50 |  |  | 10.50 |  |  |
|  | Margin (%) |  | Varies |  |  | 3.75 |  |  | 0.95 |  |  | 0.75 |  |  |
| Footnote number |  | (2)(3) |  |  | (4) |  |  | (5) |  |  | (6) |  |  |
(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Interest on Facility G is calculated based on the 3-month JIBAR in effect from time to time plus a margin of (i) 3.00% per annum until January 13, 2023; and then (ii) from January 14, 2023, (x) 2.50% per annum if the Facility G balance outstanding is less than or equal to ZAR 250.0 million, or (y) 3.00% per annum if the Facility G balance is between ZAR 250.0 million to ZAR 450.0 million, or (z) 3.50% per annum if the Facility G balance is greater than ZAR 450.0 million. The interest rate shall increase by a further 2.00% per annum in the event of default (as defined in the Loan Documents). (3) Interest on Facility H is calculated based on JIBAR in effect from time to time plus a margin of 2.00% per annum which increases by a further 2.00% per annum in the event of default (as defined in the Loan Documents). (4) Interest on Facility A and Facility B is calculated based on JIBAR plus a margin, of 3.75%, in effect from time to time. (5) Interest is charged at prime plus 1.25% per annum on the utilized balance. (6) Interest is charged at prime plus 1.00% per annum on the utilized balance. Interest expense incurred under the Company’s South African long-term borrowings and included in the caption interest expense on the condensed consolidated statement of operations during the three and six months ended December 31, 2022, was $3.0 million and $5.7 million, respectively. There was no interest expense incurred during the three and six months ended December 31, 2021. Prepaid facility fees amortized included in interest expense during the three and six months ended December 31, 2022, were $0.2 million and $0.4 million, respectively. There was no prepaid facility fee amortization during the three and six months ended December 31, 2021. Interest expense incurred under the Company’s K2020 and CCC facilities relates to borrowings utilized to fund a portion of the Company’s merchant finance loans receivable and this interest expense of $0.3 million and $0.5 million, respectively, is included in the caption cost of goods sold, IT processing, servicing and support on the condensed consolidated statement of operations for the three and six months ended December 31, 2022.

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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 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (h) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(c)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (g) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1C -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495334-112611 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1E -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495348-112611 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1I -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495371-112611 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 470 -SubTopic 20 -Section 50 -Paragraph 1B -Subparagraph (i) -URI http://asc.fasb.org/extlink&oid=123466505&loc=SL123495323-112611 + Details
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