PIC would consider investing in SAA — but only if it passes the test, says Dan Matjila
‘We are not closing the doors. Once you have implemented your turnaround strategy and improved governance … we can consider investing’
The Public Investment Corporation (PIC) would consider investing in state-owned enterprises such as South African Airways (SAA) if they met its investment criteria, CEO Dan Matjila told Parliament on Tuesday.
Referring directly to SAA, he told Parliament’s standing committee on finance: "We are not closing the doors. Once you have implemented your turnaround strategy and improved governance … we can consider investing."
The PIC manages investments on behalf of the Government Employees Pension Fund (GEPF), the Unemployment Insurance Fund (UIF) and the Compensation Fund, in addition to a number of smaller funds. Its total assets under management stood at R1.928-trillion at the end of March.
Matjila said the PIC’s investment philosophy was based on two pillars, financial returns and sustainable investing.
The latter required companies to perform well in terms of environmental, social and governance (ESG) issues. State-owned enterprises compared unfavourably with listed companies, which delivered a higher financial return and had better ESG scores, he said.
SAA is under the spotlight as it has asked the government for a R13bn recapitalisation over three years.
It received R2.2bn at the end of June, when the government stepped in to repay Standard & Chartered R2.2bn, and a further R3bn at the end of September to repay Citibank and provide working capital.
In the interim, it has borrowed funds from the National Revenue Fund.
It was expected that the gap would be filled by the government selling its 39% stake in Telkom, valued at about R13bn, but this fell through last week.
Treasury said last week that the plan for SAA would be provided at the medium-term budget policy statement on October 25.