Factoring Agreement Will Support Technology Company’s Growth and Development of Its TOT Money Mobile Commerce and Payment Processing Platform in Russia and Other Emerging Markets
MIAMI & MOSCOW--(BUSINESS WIRE)-- Net Element International Inc. (NASDAQ: NETE), a technology driven group in mobile commerce and payment processing, as well as in entertainment and culture Internet destinations in Russia and other emerging markets, today announced that its mobile payment processing company, TOT Money, has entered into a 300 million rubles (approximately $9.5 million) factoring agreement with Alfa-Bank, Russia’s largest private bank. The factoring agreement effective as of September 28, combined with a credit facility of 300 million rubles (approximately $9.5 million) that Alfa-Bank extended on August 17, will help support the company’s continued growth and development in mobile commerce.
TOT Money, a platform that facilitates transactions via SMS on any phone and mobile network in Russia, is expected to become the lead driver of Net Element’s mobile commerce payment processing division. Most consumers today prefer mobile commerce because of the safety, accessibility and convenience it provides.
As part of the factoring agreement, Alfa-Bank will serve as the collector and processor of accounts receivables for TOT Money and will provide TOT Money with financing to support its growth strategy. It will enable Net Element to directly pay its transactional partners in the value chain, significantly decreasing the time between the collection and distribution of profits garnered from sales.
“There is significant demand for mobile payment processing in Russia’s mobile commerce marketplace, and we believe that TOT Money is ideally positioned to capitalize on these unique market opportunities,” said Ilina Polina, Alfa-Bank’s business development director.
Dmitry Kozko, Net Element’s president, said, “This factoring agreement will enable the team at Net Element International to take TOT Money’s business to the next level and become one of Russia’s leading mobile payment processing companies. We are positioning TOT Money to process up to 600 million rubles per month in mobile payments and continue to attract top customers as we build upon our mobile commerce and payment-processing platform for Russia and other emerging markets.
“In addition to our relationship with the influential Alfa-Bank, our agreements with the ‘Big Three’ mobile carriers in Russia and our broad network of partners, content providers and merchants will greatly enhance our company’s growth potential,” Kozko added.
About Net Element International Inc. (NASDAQ: NETE)
Net Element International Inc. (NASDAQ: NETE) is a technology driven group in mobile commerce and payment processing, as well as in entertainment and culture Internet destinations in Russia and other emerging markets. Its international technology development centers, extensive global network and high-level business relationships in Russia and the Commonwealth of Independent States strategically position the company for growth in these markets and beyond. Net Element International owns and operates a mobile-commerce company, TOT Money, as well as several Internet properties that create social and business communities in the entertainment, music, motorsports and film industries. Net Element International’s portfolio includes: www.TOTmoney.ru; www.Motorsport.com; www.Openfilm.com; www.Music1.ru; www.ARLive.com and www.Yapik.com. For more information, visit www.NetElement.com.
Founded in 1990, Alfa-Bank is Russia’s largest private bank in terms of total assets, total equity, customer accounts and loan portfolio. The full-service bank operates in most sectors of the financial market, including retail and corporate lending, investment banking, trade finance and asset management. According to its audited IFRS financial statements for the full year 2011, the Alfa Banking Group, which comprises OJSC Alfa-Bank as well as its subsidiary banks and financial companies, had total assets of $31.4 billion, gross loans of $23.2 billion, and total equity of $3.4 billion. Net profit after tax for 2011 amounted to $641 million. The Alfa Banking Group’s corporate and retail client base has grown considerably during the past several years. As of January 2012, Alfa-Bank Group serves approximately 55,800 corporate and 6.3 million retail customers, while the branch network consists of 465 offices across Russia and abroad, including a subsidiary bank in the Netherlands and financial subsidiaries in the United States, the United Kingdom and Cyprus. For more information, visit www.alfabank.com.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements reflect Net Element International's (NEI) and its management’s current beliefs, expectations or intentions regarding future events. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Words such as “will,” “become,” “enable,” “may,” “could,” “should,” “expect,” “expected,” “proposed,” “contemplated,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, all statements and information regarding the intent, belief or current expectation of NEI and its management. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of NEI and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to: (i) TOT Money’s borrowing capacity under its factoring facility and/or credit facility with Alfa-Bank, which is subject to change from time-to-time pursuant to the terms of such facilities; (ii) adverse changes in the demand for mobile payment processing in Russia; (iii) adverse changes in NEI’s and/or TOT Money’s relationships with mobile carriers, lenders and other business partners; and (iv) adverse changes in general business and economic conditions, particularly in Russian and other emerging markets where NEI and TOT Money principally operate. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K and the subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K filed by each of Net Element International, Inc. and Net Element, Inc. with the U.S. Securities and Exchange Commission (the “SEC”), the definitive joint proxy statement/prospectus filed by Net Element International, Inc. with the Securities and Exchange Commission and future reports and other filings by Net Element International, Inc. with the Securities and Exchange Commission. NEI anticipates that subsequent events and developments may cause its views and expectations to change. NEI assumes no obligation, and it specifically disclaim any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by law.
Source: Net Element International Inc.