Darco unable to commence legal due diligence on Gaoyi project, pending documents from ex-deputy chairman
DARCO Water Technologies has been unable to commence legal due diligence on its Gaoyi project, as it waits on additional documents from former non-executive deputy chairman, Wang Zhi.
In response to queries from the Singapore Exchange (SGX), the company on Monday said the due diligence process is still in progress and pending the receipt of additional information, documents and key datapoints requested from Mr Wang since May this year.
It has since commenced preliminary due diligence, noting that travel restrictions amid Covid-19 have made it "difficult" for relevant parties to undertake due diligence, especially in 2020.
Darco had, in April this year, came to know that the Gaoyi plant was ready and operational from Mr Wang's legal counsel.
From around April 6, it commenced initial engagement with four technical consultants with a view to engage one of them to assist the company with technical due diligence on the Gaoyi Plant.
Binnies Singapore was appointed as Darco's independent third party technical and economic due diligence consultant on June 3.
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Darco said it had requested for Mr Wang to provide additional information, documents and datapoints since May 24, 2021.
But Mr Wang recently informed the company that he would "need to go on-site to obtain certain relevant information and documents, particularly, from the local authority".
Therefore, Darco has not been able to commence "comprehensive and meaningful" legal due diligence.
It said it has instructed its legal advisors, Morgan Lewis Stamford LLC together with its affiliate firm in China, to be on standby to commence the legal due diligence as soon as the information has been provided.
Darco "hopes" to complete the acquisition of the Gaoyi project by the first quarter of 2022, subject to the outcome of the due diligence investigations being satisfactory and the project meeting the company's investment criteria.
Mr Wang ceased to be Darco's non-executive deputy chairman and non-executive director in April this year. He had been appointed to the board in April 2018.
Shares of Darco last traded at 18.6 Singapore cents on July 28.
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