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South Africa not looking for bailout from government pension fund, finance minister says

Daniel Matjila

A report that South Africa's National Treasury is seeking as much as 100 billion rand ($7.5 billion) from the government workers' pension fund to finance struggling state companies is untrue, Finance Minister Malusi Gigaba said.

The Public Investment Corp., which manages the fund and has about 1.86 trillion rand in assets, has been asked by the Treasury to buy its entire 12 billion rand stake in Telkom SA SOC Ltd. to pay for a bailout of South African Airways, two people with direct knowledge of the situation told Bloomberg News last week. They asked not to be identified because the talks are private. CEO Daniel Matjila rejected the request, saying a purchase of the 39% shareholding would leave the PIC overexposed to the landline provider, they said.

"The minister finds these reports malicious and unconstructive," the National Treasury said in an emailed statement Monday. "No formal or informal request has been sent to the PIC for such funds."

Mr. Gigaba has called an urgent meeting with the PIC board "to deal with this matter and other pressing issues," the Treasury said.

In addition to SAA, which is technically insolvent, the government needs cash for state power utility Eskom Holdings SOC Ltd., oil company PetroSA and defense firm Denel SOC Ltd., according to the sources. The companies have been beset by allegations of mismanagement and corruption and the running of state firms was cited by rating agencies when they cut South Africa to junk in April.