Listed construction and engineering company Group Five, whose bank guarantee providers have paid $106.5 million (R1.45 billion) to the Cenpower Generation Company for the $410m Kpone power plant in Ghana, expects a ruling by the year-end on its contractual disputes with Cenpower.
The amount paid by Group Five’s bank guarantee providers to Cenpower swelled to $106.5m in December when Cenpower requested a further $43.8m be paid to the company after previously being paid R62.7m in delay damages.
The first payment followed the dismissal of Group Five’s urgent interdict application to the high court in Joburg to stop Cenpower demanding delay damages from its bank guarantee providers.
Group Five yesterday said payment was made by its bank guarantee providers on the basis of the legal requirements of on-demand bonds, which stated that bonds must be separated from the contract and their related contractual claims and disputes, and therefore not on the merits of the contractual claims presented by the client.
The group said its local and international legal experts continued to progress its contractual rights and entitlements for payment of all amounts due and owing under the contract, including the recovery of delay damages paid in terms of the guarantees and other claims against the client.
It said the group expected to finalise the majority of these counter-claims over the next three to four months.
“After this, these claims will be submitted to the International Chamber of Commerce in Paris for the resolution of the disputes through expert proceedings.
“This is a much faster process for resolution of disputes than arbitration. The group expects a ruling to be made by the end of 2019,” it said.
Group Five added that any amount the group would be held liable for and/or entitled to needed to either be agreed between the parties or determined through the dispute resolution mechanism in the contract prior to its payment. The group stressed that the amounts already paid did not reflect the counter-claims against Cenpower and other parties the group was legally entitled to and pursuing.
Group Five said its cautionary announcement released in December remained in place, because these events may have a material impact on the price of its shares. It advised shareholders to continue to exercise caution when trading in their shares until a further announcement was made.
Shares in Group Five rose a massive 51.52 percent on the JSE on Wednesday to close at R1.