11/05/2010 Elias Masilela during the National Planning Commission's inaugural meeting. Picture: Phill Magakoe

Johannesburg - South Africa's state-owned pension fund defended its investment in US oil firm Camac Energy Inc, saying on Friday it was justified in agreeing to pay more than five times the then market value of Camac's shares for a 30 percent stake.

The Public Investment Corporation (PIC), which manages 1.4 trillion rand of South African government employee retirement funds, agreed in November to pay $270 million for shares issued by Camac equating to a 30 percent stake.

Camac's total stock market value at the time was around $150 million.

“PIC's entry valuation is at a discount of 30 percent to the net asset valuation of Camac Energy,” Elias Masilela, chief executive officer of the PIC, said in a statement.

Camac shares have risen about 60 percent since the PIC investment, valuing it at around $245 million - still well below the pension fund's purchase price.

Houston-based Camac, which explores for oil and gas in Nigeria, Kenya and Gambia, had warned days before the PIC threw it a lifeline that it could go bust.

“While the company was low in working capital based on recent company filings, the fundamentals were still sound and typical of energy and production companies in this stage,” Masilela said.

Camac said earlier this month it planned a stock market listing in Johannesburg. - Reuters