Public Investment Corporation
THE Public Investment Corporation, a government-owned asset management firm, has become something of the investor of last resort in South Africa, and a political tool of sorts. How else to explain its willingness to sub-underwrite Lonmin’s $400m rights offer even in the face of market disdain for the business plan on which it was premised. Speaking at the Jo’burg Indaba conference in October, Madavo described the PIC as “looking for opportunities”. He would also argue that eventually the platinum market will turn, but saving Lonmin from bankruptcy was more about averting the loss of more than 30,000 jobs in the politically- and socially-charged district in which the Marikana atrocity occurred in 2012. In any event, Madavo’s PIC now owns 29.99% of Lonmin. It’s questionable whether a company managing state pensions should be taking on this risk. Yet it does. The PIC is also a shareholder in Resource Generation and was party to a management coup whilst a year ago the PIC was linked with supporting Baroka Platinum in a R3bn investment in Atlatsa Resources. With Anglo American wanting to sell its 49% stake in Atlatsa, it’s likely the PIC will be assisting the deal although possibly at a much lower price this year. The PIC successfully sold its 9% stake in Northam Platinum to the firm’s BEE partner. There are likely to be many more interventions by the PIC as 2016 rolls on.
LIFE OF FIDELIS
Madavo worked as a metallurgist for Anglo American many moons ago before becoming an investment analyst in mining culminating in a VP role at Citigroup in Johannesburg. He moved to the PIC in 1997 first as portfolio manager for African listed companies where he campaigned against bloated executive pay, and then in his current position. A Zimbabwean, he holds a BSc [Hons] in chemical engineering from City University London.
- Web Address: www.pic.gov.za