Company sources said the sale of Orissa Synthetics, the polyester division, has been ratified by the financial institutions. The rest of the restructuring is also expected to be approved by the FIs within the next few weeks. The restructuring exercise would enable the company to focus on its core businesses of paper and cement.

The sale of Orissa Synthetics Ltd to Reliance will drastically improve the bottomline of the loss-making JK Corp. Orissa Synthetics' not only had a debt burden of over Rs 155 crore but was also making heavy losses. With Reliance taking over all the liabilities of the company, JK Corp will get rid of annual interest burden of nearly Rs 25 crore, sourcessaid.

Lakshmi Cement, company's two million tpa capacity division, will be transferred to a new company and `consolidated' with the one million tpa capacity of JK Udaipur Udyog Ltd, thus making it a three million tpa cement business, according to a company press release.

JK Corp's chairman Hari Shankar Singhania said after a board meeting that the restructuring would enable the company to emerge as stronger and focussed long term player in paper and cement business. "We have long been a key player in both the core industries of cement and paper and have been investing consistently in terms of capacity enhancement," he said.

Singhania said that under the proposed restructuring, all the long term partners of the company including its employees, dealers and others will stand to gain as we ourselves gain greater strengths in the market place.

"The new JK Corp plan intends to harness the strong brands such as JK Paper, Lakshmi Cement that the company presently has. We will continually look at buildingand strengthening these brands which today are popular household names," he said.

According to JK Corp's deputy managing director Harsh Pati Singhania, both paper and cement businesses hold immense growth possibilities in an economy like India and will continue to grow healthily over the next few decades. "These also happen to be the industries where enormous investments make entry of new players difficult. We intend to take advantage of our historical and early investments in these crucial sectors," he said.