Darco Water Technologies awaiting outstanding documents from ex-deputy chairman for Gaoyi project

DARCO Water Technologies (BLR : BLR 0%) on Friday said its board of directors is still assessing whether to proceed with its proposed investment in the Gaoyi domestic wastewater treatment project.

In a filing to the Singapore Exchange, Darco said the company and its former non-executive deputy chairman Wang Zhi - who had in 2018 signed a non-binding letter of intent for the project - have until March 23, 2022 to determine if the company will proceed with its investment in either the Gaoyi project or any other alternative water treatment asset.

The group said it intends to use all the time available to assess whether the Gaoyi project or any other investment is feasible.

Darco said it is currently awaiting the provision of outstanding information from Mr Wang. Should this information be provided to the company and its board of directors by Sept 30, the company will be able to commence legal and further technical and economic due diligence to facilitate the acquisition of the Gaoyi project by March 2022.

In the event the information provided and due diligence investigations are satisfactory, and if the Gaoyi project meets the company's investment criteria, Darco's board of directors said it anticipates that it is likely to proceed with its investment in the Gaoyi project.

If the information is not provided or unsatisfactory, or if the project does not meet the company's investment criteria, the board is then likely to issue a notice of rejection to Mr Wang. This will then trigger Mr Wang's obligations under the supplemental agreement and supplemental deed to provide the alternative water treatment asset.

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Darco also said it has formed a committee to liaise with Mr Wang and his team on the provision of the outstanding information.

The outstanding information includes certificates from the Environmental Protection Bureau and the Ministry of Housing & Urban Redevelopment that indicate the approval of commencement of commercial operation of the Gaoyi project, copies of receipts of monthly tariffs for the past 12 months, as well as historical financial and operational performance for the project since January 2020.

Shares of Darco closed unchanged on Friday at 18.6 Singapore cents.

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