Investment Community Rocked By News of Neptune's Plant Explosion Print E-mail
By M.E.Garza   
Friday, 09 November 2012 02:39
icon_newsnotesMuch of the biotech investing community was left shocked following news reports about the death of two employees after an explosion and fire at the Sherbrooke, Quebec, Canada plant operated by Neptune Technologies and Bioresources NASDAQ: NEPT) (TSX-V:NTB).

CTVNews.ca was among the first to report via video that another 19 people were injured, four with severe burns.

It is at this manufacturing facility where Neptune manufactures its famous Krill oil products. Earlier this year, the company announced that it was planning an expansion at the plant that would substantially increase production capacity to 300 metric tonnes by the fourth quarter of fiscal 2013, and then to 500 metric tonnes by Q4, 2014.

Shares of Neptune, which were halted at 2:37 p.m. EST on Thursday and may remain halted all day Friday unless NASDAQ officials decide otherwise.

One would assume that Neptune is well insured, with both business interruption insurance, and liability insurance.There are reports that the existing, 150,000kg, in-production part of the plant may be heavily damaged or destroyed. Gaetan Drouin, a local fire chief said "Just looking at the damage to the building you can see it was probably very violent.”

Last month, Neptune closed a $34.1-million public offering, selling 7,318,000 shares at $4.10 each. Approximately $5-million from that raise was set aside to finance the expansion of the plant.

Neptune management has extended their most sincere condolences to the victims' families and friends.

“As soon as we were notified of the situation, we made our way to Sherbrooke” said Michel Chartrand, Neptune’s chief operating officer. “Upon our arrival, we began working with emergency services to understand what caused this incident. We will continue to closely collaborate with them for as long as it is necessary. We want to understand what happened.”

It would be perfectly logical to assume that we will see some volatility in Neptune trading as investors hear confirmation of these and many other details from officials who are investigating the aftermath.  

Our own thoughts and prayers go out to those killed and injured in the explosion, and their families.


Disclosure: Long NEPT



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