Shares in dual-listed Net1 UEPS Technologies gained 0.84% on the local market, and 2.04% in the US, on Friday at close of trade.
Locally, the stock ended the day at R120, while its Nasdaq close was $11.53. This is despite an update in terms of the Constitutional Court ruling ? indicating the South African Social Security Agency (SASSA) was republishing the tender ? being placed on its Web site.
According to Net1's latest results, if it loses the deal in six months, it would face "financial exposure of R41.5 million", which drops to R32 million if the contract terminated within 12 months, it told the court.
The court ruled SASSA had 30 days to implement a new tender process, a period SASSA understood to mean until 5 June. It says it has now started the process of issuing a new five-year tender.
According to the ruling, if SASSA's request for proposals, which tests the market, shows it is not tenable to issue a new tender, it can continue to use Net 1's services.
Lengthy process
Net1's R10 billion deal, to provide the payment solution to around 15 million grant recipients, was sent back to the drawing board in April, after the Constitutional Court ordered the agency to issue a new five-year tender. That decision followed last November's ruling that the contract was invalid, but its future was put on hold, pending a Constitutional Court decision over an equitable remedy.
Since the judgement, SASSA has made progress towards issuing the new tender, and has set up a bid specification committee. It anticipates the entire process to the awarding of a new tender to take as long as nine-and-a-half months, its court filing shows.
Net1 chairman and CEO Serge Belamant has said the publication of a new tender "may take some time". SASSA estimated, in court papers, that the total time for implementing a new system would be not less than 24 months and would cost between R5 million and R10 million.
The court's declaration of invalidity was based on two grounds: SASSA failed to ensure Net 1 unit Cash Paymaster Service's empowerment credentials were objectively confirmed, and the second bidders' notice did not give enough clarity around the biometric requirements, rendering the process uncompetitive.
In a separate Friday announcement, Net1 said it had clawed back R275 million from SASSA for the recovery of additional implementation costs incurred during the beneficiary re-registration process.
SASSA had asked Net1 to biometrically register all social grant beneficiaries (including all child beneficiaries), in addition to the grant recipients who were issued with the SASSA-branded smart cards, which resulted in an additional 1.1 million registrations that were not part of its initial deal.
The reregistration, says Net1, has saved the state about R3 billion a year because duplicate and invalid grants were removed from the system. Rival bidder AllPay - the Absa unit that took the matter to court - told the court that, had it won the deal, SASSA would have saved R926 million over five years.
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