The Public Investment Corporation (PIC) has confirmed it will not be investing in Iqbal Survé’s embattled tech start-up, Sagarmatha Technologies.

“Following the deliberations by the investment committee, it was decided that the PIC will not participate or invest in Sagarmatha’s private placement and IPO [initial public offering],” said Deon Botha, head of corporate affairs at PIC.

Botha said the corporation was requested to participate in the private placement of shares in anticipation of the public listing of Sagarmatha Technologies on the Johannesburg Stock Exchange (JSE). To list, the company has to first raise R3-billion.

Sagarmatha Technologies has punted itself as the next tech giant – in the same vein as Amazon and Google, and has received a projected valuation of R50-billion from a US-based valuation firm. Local asset managers have however criticised the valuation as the company is technically insolvent. Sagarmatha consists of a collection of loss-making assets largely controlled by businessman and Independent Media boss Iqbal Survé.

It was widely speculated that the PIC would have to provide capital in order for the listing to succeed. Survé is already indebted to the corporation which loaned him the money to acquire Independent Media in 2013. A 50% repayment of a few hundred million on this loan comes due in August this year.

The PIC took the decision not to invest on Wednesday this week. That evening Sagarmatha announced on the Stock Exchange news Service (Sens) the listing would be cancelled due to technical non-compliance with the JSE listing requirements as a result of the company not submitting relevant financials to both the Companies and Intellectual Property Commission and the JSE in time.

In a press release – and not in the Sens – Sagarmatha claimed it has capital commitments of R4-billion and would consider additional options which include: “offers to purchase from international investors for its four largest businesses; and/or listing on the New York Stock Exchange (NYSE) and Hong Kong Exchange as primary; and/or a primary listing on the JSE and a secondary listing or, and/or a dual listing.”

Requests for the PIC to participate in private placements occur regularly, Botha said.

“Discussions that take place at the Investment Committee or any committee that considers investment proposals are confidential. As such, it would not be appropriate for the PIC to publicly discuss deliberations of the Investment Committee, which is a sub-committee of the PIC board,” he concluded.

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