JSE-listed Group Five’s share price rose to 48c a share early on Thursday, compared with Wednesday’s close of 24c a share, after the company announced that it had received expressions of interest (EOIs) from a number of parties for various parts of the business.
Group Five’s board of directors and its appointed corporate advisers are considering the EOIs, it said. The embattled company is embroiled in a dispute with a client, Cenpower, regarding the Kpone gas and oil-fired combined-cycle power plant project, in Ghana. Group Five earlier this week reported that $43.8-million had been paid to Cenpower by the group’s guarantee providers.
Group Five has been in discussions with its legal advisers and senior counsel, as well as its bank guarantee providers, and is considering available legal options. Engineering News Online reported that the company had “strongly” disputed the amount claimed, stating that the client had confirmed that the construction of the plant was complete, with only testing and commissioning left to be performed.
Group Five said it could not complete the testing, alleging that the fuel provided by the client was contaminated. The group said its legal advisers believe the company’s case has merit and that there is a reasonable prospect of recovering payment from the client.
Group Five has submitted the dispute to the International Chamber of Commerce, in Paris, for resolution, since it is a quicker process than arbitration. The first disputes were expected to be completed in early 2019.
The group posted a R1.43-billion operating loss for the 2018 financial year and announced in October that it would shift its focus to its Developments & Investments and Operations & Maintenance businesses, with less focus on the Construction and Engineer, Procure and Construct businesses.
Group Five’s shares were trading at 26c a share at 10:20 on Thursday, up 8.33% compared with Wednesday’s close.
