Cash-strapped construction firm Group Five has relocated its offices as part of an effort to cut costs.
The JSE-listed group said on Monday that its South African constructionoperations have been relocated to Spartan, on the East Rand, to owner-occupied premises. The group’s rest of Africaconstructionoperations are now located in Boksburg, also on the East Rand, utilising an existing rental agreement. The corporate office and the investments and concessions operations have moved to Sunninghill, in Johannesburg.
Group Five has signed a three-year lease for the Sunninghill property, with a three-year option to renew. Its corporate head office was previously located in the Waterfall Business Estate, Midrand. The construction firm also announced that its investments and concessions cluster had secured the early works contract for the construction of office accommodation for the Department of Rural Development and Land Affairs.
“The awarding of the enabling works [contract] represents significant progress towards closing this public-private partnership (PPP) project “The PPP project encompasses the design, construct, finance and operation of office accommodation for the department for a 25-year concession period,” the company said. The early works contract will be executed by Group Five’s construction cluster.
The process to wrap up the troubled gas– and oil-fired combined cycle power plant contract in Kpone, Ghana, continues, added the company. Some commissioning delays have extended the completion date from June to end July. However, the group said that the additional cost to complete the contract was “not material”.
“Even against any further potential delays, the gross maximum delay penalty exposure remains capped at $62.5-million. “This amount does not reflect the counter, or other, claims the group is legally entitled to. Against these possible penalties, the group continues to progress its own contractual claims.”
Group Five in May secured R650-million in short-term bridge funding. Following receipt of these funds, Group Five said on Monday that it was still evaluating alternative funding options to recapitalise the group, which including a possible equity raise.