Property development company GRP Limited announced, on May 1, that it has appointed a new main contractor, RSK Global Visions (M) Sdn Bhd, to complete its affordable housing project in Seri Iskandar, Perak. RSK Global Visions will replace the project's former main contractor, Energiser Enterprise Sdn Bhd (EESB). The total contract sum is RM92.83 million or around $28.1 million.
In light of the foregoing award of contract and after a preliminary review of the group's unaudited financial results for 3QFY2025 ended March 31, the group says it is expecting to report a "significant net loss" for the quarter, compared to the same period the year before. In the 3QFY2024, GRP also reported a loss of $585,000, 61.2% higher than the loss of $363,000 in the corresponding period the year before.
The net loss is mainly due to higher total project costs and liquidated and ascertained damages from the delay in project completion, says GRP.
On June 10, 2024, GRP's 70%-owned indirect subsidiaries, Rumah Kami Sdn Bhd and Ratus Nautika Sdn Bhd, received two statutory demands. One of them was from EESB, which issued a statutory demand to Ratus Nautika for the payment of RM3 million, the retention sum under a letter of award dated July 26, 2021.
"Should payment not be made within 21 days of receipt, EESB has the right to commence winding-up proceedings against Ratus Nautika without further notice," said GRP at the time. It added that its legal advisers said that the demand was "defective" since the sum was not due for payment yet.
EESB was also to withdraw the defective demand and Ratus Nautika had accrued for the retention sum on its account at the time. In its June 2024 announcement, GRP noted that the amount had not been paid to EESB as the project was still ongoing.
On Aug 8, 2024, EESB served a winding-up petition on Ratus Nautika for not paying the sum it requested. EESB also issued a letter to Ratus Nautika stating that it intended to suspend the execution of works.
On Dec 11, 2024, EESB withdrew the winding-up petition, which was then struck off and dismissed.
On Feb 10 this year, Ratus Nautika had asked EESB to "rectify various defects and defaults" in relation to the affordable housing project. "As EESB had not done so within the contractual cure period, Ratus Nautika has issued a notice of determination dated Feb 10, 2025, erminating EESB's appointment with immediate effect," said GRP.
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It added that it was sourcing for a new contractor to carry on and complete the project.
On Feb 20, GRP said that Ratus Nautika formally issued a request for arbitration to EESB "in accordance with the relevant arbitration rules stipulated in the contract between the parties".
On April 1, GRP announced that EESB filed a civil suit against Ratus Nautika and its directors at the Ipoh High Court and subsequently obtained an ex-parte Mareva Injunction Order to prevent GRP's subsidiary from withdrawing or utilising up to the sum of RM3.7 million from its business account, investment account and other current accounts of Ratus Nautika in Malaysia except for its mandatory designated Housing Development Account (HDA). There was also an order for Ratus Nautika to "affirm and file an affidavit providing details of its business account, investment account and fixed deposit account in Malaysia except for the HDA account".
At the time, GRP said it has engaged legal representation in Malaysia and intends to "vigorously contest and challenge EESB's civil suit and injunction application".
Shares in GRP closed 3.7 cents higher or 82.22% up at 8.2 cents on April 30.
