Darco Water decides not to invest in alternative to Gaoyi project

DARCO Water Technologies BLR has decided not to proceed with its investment in a water treatment asset proposed as an alternative to the Gaoyi project.

Both the investments in the alternative asset and the Gaoyi project were proposed by the group's former non-executive deputy chairman Wang Zhi - who decided to retire from the post last year.

In its latest bourse filing on Monday (Mar 21), Darco Water said its board had determined that such an investment would not be in the interest of or beneficial to the company.

It will reach out to Wang over the compensation sum of S$2 million payable once its notice of rejection is delivered.

The move comes nearly 6 months after Darco Water rejected an earlier proposal by Wang for the proposed investment in a Gaoyi domestic wastewater treatment project.

In 2018, the company had announced that it had signed a non-binding letter of intent with Wang for the Gaoyi project, which holds a 30-year concession on a wastewater treatment plant.

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Darco Water Tech, which is involved in the business of water and wastewater treatment solutions, issued a notice of rejection to Wang on Sep 23, 2021, after its board assessed that the Gaoyi project was not a suitable asset for asset injection.

The board said at the time that it was unable to obtain certain critical information, documents and data points to assess the investment's suitability. There was also some uncertainty in terms of the tariffs and capacity requirements that the local government would impose in the future.

Following the rejection of the Gaoyi project, Wang was required to offer an alternative water treatment asset.

Shares of mainboard-listed Darco Water closed flat at S$0.13 on Monday. 

READ MORE:

• High Court dismisses Darco Water's claim against ex-CEO
• Darco shareholders reach 'amicable resolution' with ex-deputy chairman
• Darco shareholders' legal proceedings against deputy chairman fall through
• Darco Water Technologies awaiting outstanding documents from ex-deputy chairman for Gaoyi project
• SGX RegCo issues notice of compliance to Darco for detailed report on Gaoyi project