NET1 UEPS Technologies is launching a bid for an inward listing on the Johannesburg Securities Exchange (JSE). The Nasdaq-listed company hopes to list shares in SA in order to gain capital for future acquisitions.
"We are trying to get an inward listing on the JSE so that our South African investors can trade their shares, as well as have the option of selling shares to raise capital," says NET1 CEO Serge Belamant.
NET1 listed in the US four years ago. Belamant says SA's exchange control regulations allowed NET1's South African investors to sell their shares, yet they could not, in turn, buy more shares in the company.
"At the time, the dollar was trading at 10 times the value of the rand, so the immediate benefits for our investors were there because their shares would multiply in value."
Belamant adds that South African investors lost out when US investors started buying up NET1 shares on the Nasdaq. "Before we moved to the US, our South African investors held 51% of our listed shares. At this moment, they only have 10% of the shares."
The smart technologies and systems provider also sees other benefits to listing on the JSE.
For example, it can offer shares to the employees of companies that it is looking to acquire. "When we bought Prism, a few months back, we could have offered the employees shares instead of cash," says Belamant.
The CEO says NET1 will also use the JSE listing as an opportunity to raise its float for future acquisitions, even though it is currently cash-flush. "We could sell shares to raise money, but at the moment we won't do that because we are a company with more than R2.5 billion in the bank. Yet we are looking at acquiring some companies out there [in the future]."
NET1 hopes to give its investors the added advantage of owning shares in a company that is listed in a country with a lucrative IT market. "At the end of the day, we will be able to offer our shareholders a higher price earnings ratio since we are a company listed on the Nasdaq, where IT companies are highly sought-after by investors."
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