Group Five’s share price plunges 15.5%
The company failed to meet an October deadline for its Kpone power-station project in Ghana
Group Five’s share price plunged 15.5% to 98c on Tuesday morning after it warned shareholders it had failed to meet the October deadline to complete its disastrous Ghanaian power station project Kpone, which contributed a R1.3bn loss in its 2018 financial year.
“Commissioning can currently not be completed with the key delay being due to contamination of the fuel being provided to the group by the client,” Tuesday’s statement said.
“The group has been informed, by two of the bank guarantee providers, that the client has issued a written demand requesting that an amount of $62.7m be paid to the client.”
In its results statement for the year to end-June, Group Five said the maximum penalty it faced for missing the original deadline for completing Kpone was capped at $62.5m.
In August 2014, Group Five announced it had been awarded the R4bn contract to build a 350MW gas- and oil-fired combined cycle power plant in the municipality of Kpone by Ghanaian group Cenpower Generation Company.
The Johannesburg high court is scheduled to rule on Group Five’s interdict against Cenpower’s $62.7m claim on Wednesday November 7.