Darco unit withdraws from proposed purchase of Canwaco; requests US$1m refund

THE Vietnamese subsidiary of Darco Water Technologies is pulling out of its proposed acquisition of a 90 per cent stake in Can Giuoc Water Works Limited (Canwaco), the mainboard-listed firm announced in a Friday bourse filing.

Darco found that the project undertaken by Canwaco was not commercially viable, primarily due to a number of technical issues. These issues remain unresolved despite the considerable length of time given to the seller, CA Trading Co, Darco said. The firm had entered a framework agreement with CA Trading in December 2017.

As a result of the latest development, Darco has given CA Trading formal written notice for a US$1 million refund. The sum was a partial payment for the acquisition, subject to due diligence and a definitive sale and purchase agreement.

Darco said that it will update shareholders when there are further developments.

Shares of the water treatment player closed flat at S$0.16 on Friday.