COMPANY COMMENT: Net1 has Sassa over a barrel of a good deal
In the past few months, Net1 CEO Serge Belamant has said his company was happy to continue distributing grants but it would be on terms that were more favourable to him
This bullish forecast is based on Wednesday’s fascinating parliamentary session with Sassa that concluded that Net1 subsidiary Cash Paymaster Services (CPS) would continue distributing grants for at least the next 12 months. Or at least that is what Sassa hopes. The agency hasn’t sat down to discuss this plan with CPS. It’s unlikely that CPS will say no; it’s equally unlikely that CPS will say, "yes, and we’ll do it on the same terms". In the past few months, Net1 CEO Serge Belamant has said his company was happy to continue distributing grants but it would be on terms that were more favourable to him than the current contractual arrangement. The current contract is based on a payment of just over R14 for every grant distributed. Given the critical importance of the continued payment of the social grants and given that right now and for the foreseeable future Net1/CPS is the only entity in a position to ensure un-interrupted payment, Sassa will have little choice but to accept Net1’...
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