South Africa’s PIC ‘Comfortable’ With Sanral Debt, CEO Says

South Africa’s Public Investment Corp., which manages state pensions, is “comfortable” with its investment in debt issued by the state-owned roads agency, Chief Executive Officer Elias Masilela said.

“From the input we have gotten, we are comfortable with our investment,” Masilela said today in an interview in Arusha, Tanzania. “To the best of our knowledge, the position of the government and Sanral is that they have to meet their obligation.”

The South African National Road Agency SOC Ltd. is using funds meant to back the debt to pay for operating expenses because the government delayed charging tolls on roads around Johannesburg after protests from unions and a court order, Finance Minister Pravin Gordhan said last week. The government will decide later how much money is needed to back the company’s debt, he said.

PIC owns 17.7 billion rand ($2.1 billion) of Sanral debt, the company said March 19 in an e-mailed statement.

The government lent Sanral 5.7 billion rand to reduce the 37 billion rand in debt the company has because of the court order blocking the tolls, Gordhan said.

-- With assistance by Sikonathi Mantshantsha in Johannesburg. Editors: Karl Maier, Ana Monteiro

To contact the reporter on this story: Andres R. Martinez in Johannesburg at amartinez28@bloomberg.net

To contact the editor responsible for this story: Andrew J. Barden at barden@bloomberg.net

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