After the arbitrator awarded GPS Food Group compensation of 74.6 million Rands, Spur Corporation set aside a reserve of 129.5 million Rands as part of the protracted dispute concerning a supposed joint venture for rib processing.
This dispute began in 2019 when GPS filed a claim against Spur Group and Spur Corporation. GPS alleged that the parties had agreed to establish a joint venture to acquire, develop, and manage a rib processing facility.
The matter was subsequently referred to arbitration. However, Spur stated its intention to fully appeal the latest decision. The appellate body is expected to review the appeal in February 2027 by a panel of three senior independent arbitrators.
Spur added that its Senior Legal Counsel believes the group is likely to win the appeal against the Award A decision. The company specified that under the automatic right of appeal provided by the arbitration agreement, it has 30 days to file an appeal.
The reserve of 129.5 million Rands includes the awarded damages of 74.6 million Rands, 10% interest from the date of the initial claim, and estimated legal costs.
The company plans to reflect the awarded capital of 74.6 million Rands in its financial results. This reserve will also cover the 10% interest at the established rate from the date of the initial claim, as well as estimated legal expenses, totaling 129.5 million Rands.
Spur forecasts that earnings per share will decrease by 31%–41%, and the overall earnings per share ratio will decrease by 34%–43%. Nevertheless, the company emphasized that this reserve will not affect its liquidity or dividends, as stable trading performance over the past five years has allowed it to maintain sufficient cash reserves to cover this lawsuit.
