KUALA LUMPUR (July 28): GDB Holdings Bhd shares rose 2.5 sen or 11.9% to 23.5 sen on Friday (July 28), after reporting a favourable decision for the group in an adjudication proceeding relating to the 8 Conlay project termination dispute.
At 23.5 sen, the construction group, which wholly owns Grand Dynamic Builders Sdn Bhd, is valued at RM215.07 million.
On Thursday, GDB said in a bourse filing that the adjudicator had ordered KSK Land Sdn Bhd’s wholly owned unit Damai City Sdn Bhd (DCSB) to pay RM97.8 million to Grand Dynamic Builders.
Grand Dynamic Builders commenced the adjudication proceeding against DCSB in November 2022, prior to the determination of the 8 Conlay project.
GDB said that in the decision received on Wednesday, the adjudicator also ordered DCSB to pay a 4% interest per annum on the adjudicated sum calculated from the decision date of Feb 10 until full payment.
DCSB was also ordered to pay costs of RM30,000, and a further sum of RM30,300 being the claimant's portion of adjudication cost.
GDB said DCSB had previously paid the sum of RM60 million out of the adjudicated sum, but that does not include the payment of late payment interest.
In 2020, Grand Dynamic Builders received a RM1.25 billion contract from DCSB to complete the construction of the 8 Conlay mixed development. It was GDB's biggest contract at the time.
But in August last year, Grand Dynamic Builders suspended its works on the 8 Conlay project, and sued KSK Land for a sum of RM120.7 million arising from the corporate guarantee.
KSK Land, in its capacity as DCSB's holding company, had executed a corporate guarantee in favour of Grand Dynamic Builders as a security for the observance and performance by DCSB of its obligations under the contracts and agreements executed between the two parties.
Grand Dynamic Builders lifted the suspension in January this year, and resumed the 8 Conlay project's façade works on Tower A after receiving partial payment from DCSB.
In March, Grand Dynamic Builders withdrew the lawsuit with liberty to file afresh, and remobilised and recommenced construction works on Tower A after receiving further partial payment, while other sections of works remained suspended, according to the group’s latest annual report.
However, DCSB failed to pay the outstanding sum under instalment in April, and both parties were not able to reach a settlement consensus after discussions and negotiations that aimed to resolve the matter amicably.
Towards the second half of April, both parties served notices of determination against each other to end the contract, which was entered in November 2020 to award Grand Dynamic Builders as the main contractor, tasked with completing the remaining main building works for the 8 Conlay project that consists of a 10-storey podium, serviced residences, hotel and strata hotel suites.