Kpone continues to haunt Group Five


Kpone continues to haunt Group Five

Published Date: 2018-12-07 | Source: Stephen Gunnion | Author: Stephen Gunnion | Comments

Kpone continues to haunt Group Five

The owners of the power project in Ghana want the construction and infrastructure to pay another $60.5 million to complete the works on the terminated contract.

Group Five's shares plunged as much as 68% yesterday after it was hit with a $60.5 million bill to complete the Kpone power plant in Ghana that it has pulled out of. The latest claim from Cenpower comes on top of the $62.7 million the Ghanaian client has already received for project delays.

The project in Kpone has been fraught with delays, some of which Group Five blames on Cenpower. Most recently, fuel provided by Cenpower to test and commission the plant was verified by three independent parties and laboratories to be contaminated. Last month, Group Five lost its court bid to halt Cenpower from demanding payment of the maximum penalty allowed from the bank guarantee providers for the project. Last week, Cenpower said it was terminating the contract, which Group Five said it wasn't entitled to do. Instead, it pulled the plug itself.

In yesterday's twist, Group Five said the $60.5 million claim represented Cenpower's evaluation of the costs to complete the works on the contract, as well as amounts relating to the recoupment of estimated losses and damages, which it believe it incurred. It has already written to the guarantee providers requesting an amount of $43.8 million - the value of on-market bonds remaining with the banks.

However, Group Five says in terms of the now terminated contract, any amounts that it is held liable for, or entitled to, need to be agreed between the parties or determined through dispute resolution.

Group Five said its financial partners and banks had confirmed their support in managing any potential liquidity event. In the meantime, it has turned to arbiters for relief. It said it had made a submission to the International Chamber of Commerce in Paris for claims against the client and that it had been advised that its claims have merit.

Its shares closed 26.5% down at 25c yesterday.

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