Future of structural steel specialist in doubt after developer Barwa's move on unfinished housing scheme
Qatari property group Barwa will terminate its contract with AIM-listed structural steel specialist Panceltica following a legal row over a residential scheme in the Middle East country.
The wrangle relates to a $343m (£210m) 2,000-unit residential scheme built for Barwa in Doha, the Qatari capital. The job remains unfinished after a dispute surfaced last December between Barwa and Panceltica over issues such as contract variations, the settlement of subcontractor deals and potential damages due to delays.
Barwa is also an investor in Panceltica and upped its stake from 14% to 20% by way of compensation for the delayed scheme in January.
In May it emerged Panceltica was considering allowing the developer to take over the whole of its Qatari operation as the row had put the financial viability of the company in doubt.
The Doha scheme is the firm's only project and termination of the contract would jeopardise Panceltica's future as an independent company.
A Panceltica statement said: “The independent directors of the company (being those directors not directly or indirectly connected with Barwa) are considering the legal position and a further announcement will be made as and when appropriate.”