NEW YORK (TheStreet) -- Net 1 UEPS (UEPS) dropped Thursday after The Constitutional Court of South Africa, the nation's highest court, ordered the cancellation of a contract awarded to the electronic payment systems technology company.
The court ordered the government to open a new tender to disseminate social welfare grants just four months after it invalidated a $947 million contract won by Net 1. The court permitted Net 1 to continue providing grants to millions of pensioners on the state's behalf until the issuing of a new five-year tender, the company announced Thursday. Net 1 also said The South African Social Security Agency (SASSA) would have 30 days to come up with a new tender.
"The tender - one of the largest in South Africa's history - was for the provision of social grants to approximately 15 million beneficiaries. The merits judgment held that the tender awarded to Cash Paymaster Services Ltd by the South African Social Security Agency, or SASSA, was unlawful," the court wrote on its website. "In today's unanimous judgment, written by Froneman J, the Court declared the contract between SASSA and Cash Paymaster for the payment of social grants invalid and ordered that the tender process be re-run."
The stock was down 11.46% to $8.42 at 2:11 p.m. More than 2.2 million shares had changed hands, well above its average volume of 132,366.
Separately, TheStreet Ratings team rates NET 1 UEPS TECHNOLOGIES INC as a "hold" with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation: