GRP Limited Provides Update on Dispute with EESB: Adjudication Decision Announced

GRP Limited (SGX: BLU), a diversified industrial group, has issued an important update on its ongoing dispute with EESB relating to an affordable housing project in Malaysia. This update contains several key developments that are highly relevant for shareholders and may influence the company’s share price in the near term.

Key Points from the Update

• Adjudication Decision Issued: The adjudicators have released their decision regarding Phases 1 to 3 of the affordable housing project. EESB had claimed a maximum aggregate amount of approximately RM10.39 million from the Group.
• GRP Ordered to Pay a Reduced Sum: The Group is required to pay an aggregate amount of approximately RM3.07 million (“Adjudication Sum”) to EESB. This is a significant reduction from the claim amount originally sought by EESB.
• Interest and Costs: GRP must also pay EESB interest on the Adjudication Sum at a rate determined by the adjudicators, in addition to costs of around RM139,855.
• EESB’s Counterclaims Dismissed: Notably, all of EESB’s counterclaims and set-offs were dismissed, which is a positive outcome for GRP.
• Temporary Ruling on Notice of Determination: The adjudicators found that the notice of determination for Phases 2 and 3 is invalid. However, GRP’s legal counsel advises that this finding is temporary and will be resolved with finality in the upcoming arbitration proceedings.
• Financial Impact: The company confirms there will be no impact on its consolidated profit or loss and other comprehensive income, as the Adjudication Sum and related costs have already been fully provided for in the FY2025 audited financial statements.
• Next Steps – Arbitration Ongoing: The Group has initiated arbitration proceedings against EESB and will seek to recover the Adjudication Sum, interest, and costs. The Asian International Arbitration Centre (AIAC) in Kuala Lumpur has scheduled the arbitration hearing for the first quarter of 2027.

Important Considerations for Shareholders

• Financial Provisioning: Since the financial impact has already been fully provisioned in the FY2025 accounts, there is no immediate negative impact on current earnings.
• Potential Recovery: GRP’s pursuit of recovery via arbitration could lead to a reversal of the financial outflow, depending on the outcome of the 2027 hearing.
• Material Developments Ahead: Investors should note that the dispute remains ongoing and further updates, particularly the outcome of the arbitration, could materially affect the Group’s financial position.
• Share Price Sensitivity: The reduction of the claim amount by over RM7 million compared to EESB’s original demand, along with the dismissal of counterclaims, may be viewed positively by investors. However, the continuing legal proceedings introduce a degree of uncertainty.

Summary

This adjudication decision represents a partial resolution in GRP Limited’s longstanding dispute with EESB. The requirement to pay RM3.07 million plus interest and costs is materially lower than the amount claimed by EESB. All related financial provisions have already been made. However, with the matter proceeding to arbitration, shareholders should remain attentive to future announcements as the dispute’s final impact on GRP’s financials remains subject to the outcome in 2027.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should conduct their own due diligence or consult their financial advisers before making investment decisions. The information is based on company disclosures as of 17 November 2025 and may be subject to change.

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