JOHANNESBURG - Shares in South African engineering company Group Five plunged more than 40 percent on Thursday after a customer’s $60.5 million compensation claim relating to the unfinished Kpone power plant in Ghana.
Group Five, which began construction of the plant in 2015 but halted work last month after Cenpower Generation Company terminated the contract for the delay-plagued project, said the Ghanaian company was seeking to recover costs to complete the project as well as alleged losses and damages.
“The group strongly disputes the amount claimed and the demand for its payment, as the client themselves confirmed that construction on the plant was complete, with only testing and commissioning to be performed,” a Group Five statement said.
Group Five suffered losses of 1.3 billion rand ($93.69 million) in its financial year to June 30, largely owing to the Kpone project.
The company in the midst of a restructuring in which it has closed multiple unprofitable operations and cut 602 permanent staff.
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Shares in the company were down 38.2 percent at 2.1 rand by 0820 GMT.
