Lords Chloro Alkali Limited has announced the termination of its lease agreement with Varahalakshmi Infrastructure Private Limited (VIPL) for a 10.4-acre property in Village Salhawas, Rewari. The decision comes in the wake of several challenges that have impeded the company's plans to establish a manufacturing unit for Chlorinated Paraffin Wax (CPW) and other chemical activities.

Key Details of the Terminated Agreement

Reasons for Termination

Lords Chloro Alkali cited three primary reasons for terminating the lease agreement:

1. Failure to Obtain CLU Approval: VIPL was unable to secure the Change of Land Use (CLU) approval for industrial purposes. This was attributed to the lack of clarity in the Manesar Bawal Investment Region (MBIR) plan for 2031-2039, which is crucial for operationalizing the premises for manufacturing and warehousing of CPW.

2. Inability to Apply for Industrial Approvals: Without a valid CLU, Lords Chloro Alkali could not proceed with applications for mandatory industrial approvals and licenses required for manufacturing and allied operations.

3. Water Quality Issues: Testing conducted by Lords Chloro revealed that the available water supply is brackish and unsuitable for the planned Chlorinated Paraffin Wax (CPW) operations.

Related Party Transaction

The lease agreement was classified as a related party transaction, as Mr. Alok Dhir, a director in VIPL, is a relative of Mr. Madhav Dhir, Whole-Time Director of Lords Chloro Alkali. However, the company affirmed that the transaction was conducted at arm's length.

Implications

The termination of this lease agreement represents a setback for Lords Chloro Alkali's expansion plans in the CPW sector. The company will likely need to seek alternative locations for its planned manufacturing unit, potentially causing delays in its strategic growth initiatives.

This development underscores the importance of thorough due diligence in site selection for industrial projects, particularly concerning regulatory approvals and essential resources like water quality. It also highlights the complexities involved in navigating regional development plans and their impact on industrial expansion efforts.

Lords Chloro Alkali Limited , a prominent player in the chemical industry, has announced a significant move to bolster its financial position. The company's Board of Directors has given the green light to raise funds up to ₹300.00 crores through a qualified institutional placement (QIP) of equity shares.

Key Details of the Fundraising Plan

• Fundraising Method: The company will issue equity shares through a Qualified Institutional Placement (QIP).
• Amount: The approved fundraising is for an aggregate amount of up to ₹300.00 crores.
• Implementation: The fundraising will be conducted in one or more tranches and/or one or more issuances.

Regulatory Compliance and Approvals

The company's statement, filed with the stock exchanges, emphasized that the fundraising is subject to necessary approvals, including:

1. Approval from the members of the company
2. Regulatory clearances
3. Statutory approvals as required

Legal Framework

The QIP will be carried out in accordance with:

• The applicable provisions of the Companies Act, 2013
• The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018
• Other applicable laws

Annual General Meeting Announcement

In the same board meeting, Lords Chloro Alkali Limited also announced that its 46th Annual General Meeting (AGM) is scheduled.

Market Impact

The decision to raise funds through a QIP could have significant implications for Lords Chloro Alkali Limited. QIPs are often used by companies to raise capital quickly from institutional investors, which can help in expanding operations, reducing debt, or funding new projects.

Investors and market analysts will be closely watching how the company utilizes these funds and the impact on its future growth prospects. The success of this QIP could be a key indicator of institutional investor confidence in Lords Chloro Alkali Limited's business model and growth strategy.

As the company moves forward with this fundraising initiative, stakeholders will be keen to see how it translates into value creation and strengthens Lords Chloro Alkali's position in the chemical industry.