IDBI has a large exposure in these two polyester manufacturing companies. RIL is also awaiting approval from IDBI and Allahabad Bank for taking control of JCT's Synthetic Fibre Division. IDBI is expected to approve the takeover of JCT's Synthetic Fibre Division in the next board meeting, sources said. RIL acquired DCL Polyester, Raymond Synthetics and JCT's Synthetic Fibre Division in the current fiscal. RIL's total acquired capacity with the acquisition of JCT will reach 2.80 lakh tonne.

Over the past two years, RIL has raised its polyester capacity to over 2.80 lakh tonne. RIL had announced in June 1999, its intention to double total polyester capacity in phases in the next three years through a combination of acquisition, fresh capacity creation and debottlenecking capacities.

DCL Polyester has a capacity of 40,000 tonne per annum. Other acquired capacities include ICI's 30,000 tonne polyester staple fibre capacity near Mumbai, and Raymond Synthetic's 66,000 tonne polyester filament yarn facility in Allahabad. RIL's production in polyester (PSF, PFY nad PET) increased 16 per cent during the nine months ended December 2000, to 5.60 lakh tonne. The company has increased its focus on speciality products in the polyester business.

In the first three quarters of the current fiscal, 63 per cent of PSF production and 19 per cent of PSF production represented speciality products, contributing a premium of 5 to 25 per cent over commodity prices.

RIL's decision to buy out JCT's polyester business will have a positive impact on both the companies involved, analysts said. Post takeover of JCT's unit, Reliance's PSF capacity would be enhanced by 55,000 tonne, while polyester fiber yarn (PFY) capacity would be 16,000 tonne higher.

Reliance will acquire JCT's synthetics division for a consideration of Rs 492 crore, which analysts said works out to be cheaper than the average acquisition cost in the industry.

In JCT's case, there will be no infusion of funds on the part of RIL into the company, but the liabilities of the division will be transferred to RIL's books of accounts. The total liabilities of JCT's Synthetic Fibre Division at Hoshiarpur Punjab adds up to over Rs 1,000 crore. JCT had referred the matter to its creditor for their approval. The creditors include 43 banks and financial institutions (FIs).