Net 1 UEPS Technologies listed on the JSE this morning, with a first bid of 200 out of the three million shares on offer.
The business boasts a market capitalisation on the Nasdaq of R10.2 billion (as of the beginning of October 2008). Because of its success on the Nasdaq, the secondary JSE listing is not about raising capital, says CEO Dr Serge Belamant.
The company, a provider of smart card technologies and systems, was locally developed and has made headway on the US exchange. "It's not really about raising the money in SA. Although, there is always the option, and maybe one day we will need it."
Belamant explains that the company experienced a diminishing local shareholder representation. "With the listing, local shareholders can now freely trade in whichever manner they would like."
He says it makes no sense that a company, which was locally developed and employs most of its employees in SA, has little exposure in the South African market.
The listing will also simplify the financial reporting for the US exchange by eliminating the trust that held the South African shareholding, he says. "The US market never understood the trust and many possible shareholders passed us over. With the listing on the JSE, the trust disappears and makes both international and local trading much easier."
Net 1 has had a history with the exchange, when it bought out Applied Technology Holdings in 2004. The company was de-listed and dissolved into Net 1 as a whole.
In response to listing, during a time when traders are hesitant about technology stocks, Belamant says: “We have been planning the listing for just over a year and we believe it will be a strong share."
Belamant also expects a few perks from the local listing. "We have been holding off on paying dividends, because they would have diluted the local shareholding with international payouts. Now we will be able to pay those dividends equally."
The company says it is also hoping to build some empowerment deals into its corporate structure. "We have several empowerment partners that have been interested in buying our stock. However, we cannot ever explain to international investors what BEE is, they will not understand.'
The company has agreed with the JSE that if there are financial reporting contradictions between the Nasdaq and the local exchange, the company will report according to Nasdaq rules.
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