Neogen Chemicals Limited , a leading manufacturer of specialty chemicals, has announced a significant update regarding the fire incident that occurred at its Dahej SEZ facility earlier this year. The company has received an additional insurance payment of ₹300.00 million (₹30.00 crore) for the damage caused by the fire, bringing the total insurance claim received to date to ₹800.00 million (₹80.00 crore).

Fire Incident and Insurance Claims

The fire, which broke out on March 5 at around 12:30 a.m. IST, affected Neogen Chemicals' Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms located in the Dahej Special Economic Zone. Following the incident, the company has been working closely with insurers to assess and recover the losses incurred.

According to the company's latest disclosure, this second on-account payment of ₹30.00 crore is based on recommendations provided by surveyors in their interim report. The payment is specifically for the loss of property, plant, and equipment. Neogen Chemicals expects further settlements to be determined in various stages as the assessment of losses continues.

Extent of Damage and Financial Impact

The fire incident has had a substantial impact on Neogen Chemicals' operations and financials. The company has reported:

The recognized loss includes damage to property, plant & equipment, inventory, and estimated incidental charges. The company has conservatively not accounted for claims related to loss of profit due to business interruption or excess value of asset reinstatement over written-down value.

Reconstruction and Business Continuity Plans

Neogen Chemicals has outlined its strategy to manage the situation and minimize business disruption:

1. Temporary Suspension: The affected Multi-Purpose Plant (MPP3) facility, warehouse, and tank farms have been temporarily suspended.

2. Reconstruction Timeline: The company estimates that the reconstruction of the impacted facilities will take approximately 9-12 months to complete and restart operations.

3. Alternate Production Arrangements: In the interim, Neogen Chemicals has shifted the production of critical select specialty products to other sites, following customer approvals.

4. Expansion Plans: The company plans to leverage its expansion at the Patancheru Plant to help minimize the impact on earnings.

Despite the setback, Neogen Chemicals has maintained its revenue guidance provided on March 7, indicating confidence in its ability to manage the situation effectively.

The company continues to update stakeholders through regulatory filings and has made the latest information available on its website. As the reconstruction process unfolds, Neogen Chemicals remains focused on restoring full operational capacity while maintaining its market commitments.

Neogen Chemicals Limited , a leading specialty chemicals manufacturer, has announced a significant financial move to bolster its capital resources. The company's Board of Directors has given the green light to raise funds up to ₹200 crore through the issuance of Non-Convertible Debentures (NCDs).

Key Details of the NCD Issue

The Board's decision outlines the following specifics of the proposed NCD issue:

• Type of Securities: Fully paid, secured, listed, rated, redeemable, rupee-denominated, non-cumulative, non-convertible debentures
• Issue Type: Private Placement
• Issue Size: Up to ₹200.00 crore
• Listing: Proposed to be listed on BSE Limited
• Tenure: 36 months from the date of deemed allotment
• Interest Payment: Monthly, on the last day of every month

Financial Implications and Security

The NCDs will be secured by creating a subservient charge through hypothecation and mortgage in favor of the Debenture Trustee. This move is aimed at providing additional security to potential investors. In case of any default in interest or principal payments, an additional interest of 2.00% per annum over the coupon rate will be applicable for the defaulting period.

Regulatory Compliance and Disclosures

Neogen Chemicals has emphasized its commitment to regulatory compliance, particularly in light of recent notices received from stock exchanges. The company disclosed that it had received notices from both BSE and NSE regarding non-compliance with Regulation 17(1A) of the SEBI Listing Regulations. This regulation pertains to the approval process for the continuation of Non-Executive Directors who have attained the age of 75 years.

In response to these notices:

• The company paid a fine of ₹3,61,080 (including GST) to BSE
• Immediate actions were taken to meet compliance requirements
• A postal ballot process was initiated for shareholder approval of Prof. Ranjan Kumar Malik's continued directorship past the age of 75

Market Impact

While the NCD issuance represents a significant move for Neogen Chemicals' financial strategy, the company stated that the regulatory fine has no substantial impact on its financial or operational activities beyond the penalty amount.

This fundraising initiative through NCDs could provide Neogen Chemicals with the necessary capital to fuel its growth plans and strengthen its market position in the specialty chemicals sector. Investors and market watchers will likely keep a close eye on how the company utilizes these funds and its compliance with regulatory requirements going forward.