Companies / 4 February 2019, 09:30am / Roy Cokayne
PRETORIA – Listed financially troubled construction and engineering company Group Five has been rocked by its chief executive Themba Mosai throwing in the towel. Group Five on Friday announced the resignation of Mosai, effective from the end of January.
It did not provide any explanation for Mosai’s resignation.
Group Five’s board and management team thanked Mosai for his valuable contribution and dedication during the 15 years of service with the group, which commenced with his appointment as managing director of Intertoll Africa.
Mosai’s resignation follows that of chief financial officer Christina Teixeira, effective from December, to pursue a different career.
Mosai was appointed group chief executive in May 2017 after being appointed interim chief executive in March 2017.
This followed the group announcing in February 2017 that then group chief executive Eric Vemer would be leaving the company in the next few weeks and Willie Zeelie, then an executive committee member and Engineering & Construction executive director, would be leaving the company at end-March 2017.
These departures coincided with Group Five reporting a headline loss a share of 310 cents in the six months to December 2016 from the headline earnings a share of 131c in the previous corresponding period.
Group Five said on Friday that its board had commenced a search for a new chief executive and appointed non-executive director Thabo Kgogo as interim chief executive.
It said Kgogo had good knowledge of the group and came with a wealth of experience as chief executive and in capital projects implementation.
The group added that as previously disclosed, Group Five was currently undergoing significant restructuring and resizing, with its future focus on developments, investments and concessions.
Group Five in October reported a significant widening in its core operating loss to R1.3 billion for the year to June from a loss of R659.4m in the previous year.
The group's financial performance in the year was materially impacted by losses of R1.3bn that were recognised on its troublesome $410m Kpone power plant contract in Ghana.
Group Five is involved in contractual disputes with the Cenpower Generation Company, the client for the Kpone contract.
The group expects a ruling by the end of this year on these contractual disputes, which have resulted in Group Five’s bank guarantee providers paying $106.5m in delay damages and to complete the project.
These payments followed the dismissal of Group Five’s urgent interdict application to the high court in Johannesburg to stop Cenpower demanding delay damages from its bank guarantee providers.
Group Five has stressed the payments made by its bank guarantee providers were 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.
Shares in Group Five closed 29.91 percent lower on the JSE on Friday at 75c.