Darco to exercise option to scrap Nambo deal

Singapore

THE board of Darco Water Technologies has directed its management to exercise the reversal option for the controversial Nambo project, and to take steps to recover the investment made and costs incurred over the conditional sale-and-purchase agreement that it had signed last November.

This was because the West Java government was not agreeable to re-negotiating the terms of the cooperation agreement that the acquisition target company, PT Jabar Bersih Lestar (JBL), had signed with it to provide waste-management services in Bogor City, Bogor Regency and Depok City in Indonesia.

JBL had previously made a formal submission to the West Java government, asking for the re-negotiation of, and modifications to, some terms of the deal, following recommendations by a consultant, but the West Java government were not agreeable.

Despite the seller Emsus Co's further efforts to engage with the West Java government to make the project viable, the government held its ground.

Accordingly, Darco will proceed to issue a notice to the seller to exercise the reversal option. The completion of the repurchase of the sale shares by the seller is expected to take place within 14 days once the notice is served.

The reversal option will enable Darco to unwind the sale-and-purchase of the sale shares, and sell them back to the seller. In return, the seller will pay Darco US$300,000 and US$400,000, being the sum of the advance payment and first payment, respectively. The target company will pay Darco US$600,000, being the sum of the second payment.

Shares of Darco closed flat at S$0.16 on Monday.