The Hindu Business Line : JK Ind to leverage on benefits from recast

J.K. Industries Ltd (JKI), flagship company of the Hari Shankar Singhania Group, on Friday announced the completion of a comprehensive restructuring exercise of its businesses that has led to its emergence as a pure automotive tyre company.

Along with the de-merger of its non-tyre business — Sugar and Agri Seeds — into separate companies namely JK Sugar Ltd and JK Agri-Genetics Ltd, JKI has also completed the merger of Vikrant Tyres Ltd with itself.

"With the completion of the restructuring exercise, we have three separate focused companies. JKI can now further leverage on the benefits of scale, logistics and greater financial strength arising from the merger of Vikrant with itself and grow into a Rs 5,000-crore turnover tyre company by 2006", Mr Hari Shankar Singhania, Chairman, JKI, told newspersons here.

JKI, as a pure tyre company after the merger of Vikrant, would have an annual turnover of about Rs 2,200 crore, company officials said.

Mr Hari Shankar Singhania said that the shareholders of JKI would not be affected by the creation of the three focused entities. "They will receive shares of JK Sugar and JK Agri-Genetics as well in the same proportion as their existing holding in JKI", he said.

According to Mr Raghupati Singhania, Vice-Chairman and Managing Director, JKI, every holder of 100 shares of Vikrant Tyres would be receiving 45 shares of JKI i.e. in the proportion of 9 shares of JKI for every 20 held in Vikrant Tyres.

Asked whether there are plans to induct strategic equity partners into any or all of the three separate entities, Mr Hari Shankar Singhania said that "we are open to such ideas". At the same time, he maintained that the group is "not actively pursuing" such ideas as of now.

He pointed out that the restructuring exercise has led itself into a situation where different opportunities, including strategic equity partners, could be pursued.

Mr Raghupati Singhania said that both JK Sugar and JK Agri-Genetics, each having a turnover of about Rs 100 crore, would be listed in the stock exchanges. He also told newspersons that the JKI's majority holding in Vikrant along with few other investments were transferred to JK Agri-Genetics before the merger of Vikrant with JKI.

"As a result of this move, JK Agri-Genetics would now become a shareholder of JKI. In lieu of its holding in Vikrant, JK Agri-Genetics would get JKI shares as per the agreed swap ratio", he explained.

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