Courts Give Go-Ahead To Jk Corp Restructuring

The Hari Shankar Singhania-controlled J K Corp has received the approval of the courts to go ahead with the proposed restructuring of its business portfolio.

"The high courts of Orissa, Gujarat and Rajasthan have given their approval to the scheme," a J K Corp source said.

The approval clears the decks for the restructuring proposal of the Singhanias. Financial institutions had already okayed the scheme.

As per the revamp plan, the paper business of J K Corp is being moved to another group company, Central Pulp Mills, while subsidiary J K Udaipur Udyog is being merged with the parent firm. Thus, the cement and paper businesses will become separate entities.

 

The Singhanias had to seek the nod of the three high courts because of the locations of the three companies involved in the revamp. While the paper division of J K Corp is located in Orissa, its cement division, Lakshmi Cement, is located in Rajasthan.

J K Udaipur Udyog, which was taken over by J K Corp from Shishir Bajaj-controlled Bajaj Hindusthan Ltd, too, is located in Rajasthan. Central Pulp Mills is based in Gujarat.

As per the recast plan, the paper division transfer is for a consideration of Rs 710 crore. Central Pulp Mills will take over its liabilities worth Rs 450 crore. This will reduce J K Corp's debt burden from Rs 1,400 crore to Rs 700 crore.

While the Sirohi (Rajasthan) plant of J K Corp has an installed capacity of 2 million tonne per annum, the Udaipur (Rajashan) plant of J K Udaipur Udyog has a capacity of 1 million tonne.

Once merged, J K Corp will have a capacity of 3 million tonne. The company sells cement under the brand Lakshmi Cement.

Apart from paper and cement, the company also has a magnetic tapes division. According to the source, there are no plans to hive it off as it is reporting profits. "It has a turnover of around Rs 20 crore with a net profit margin of 10 per cent. There are no plans to sell it off," the source said.