Kolkata, Dec. 22
THE Kanpur-based JK Synthetics Ltd, which once used to be the flagship textile venture of the undivided JK Group, may soon become a shell company holding some investments only.
The company, which is now owned by Mr Yadhupati Singhania, is trying to sell its last production unit.
An asset sale committee has been formed and the returns would be used to pay off the debts. JK Synthetics, which had turned sick in April 1998, used to have interests in textiles and cement.
The cement business was de-merged and was later transferred to a new company, JK Cement Ltd.
Subsequent to the de-merger, JK Synthetics operated with two textile factories, one located at Jhalawar, and the second in Kota.
Last December, the Kota plant was sold to the Surat-based Arafat Group. The deal was approved by the Appellate Authority on Industrial & Financial Reconstructionin January this year.
A senior official of the Yadhupati Singhania Group said the company was now trying to sell the Jhalawar factory.
"An asset sale committee has been formed for this purpose. Various proposals have been received and they are currently being studied. In short, the sale process is going on," the official told Business Line.
The Jhalawar plant has two manufacturing lines. While one is for acrylic fibre, the other is nylon tyre yarn.
Capacity of the acrylic fibre line is 18,000 tonnes per annum and that of the nylon tyre yarn is 4,500 tonnes per annum.
Once this factory is being sold off, JK Synthetics would not have any further manufacturing activity.
It would be left with some investments only. In practical terms it would become a shell company.
The money generated out of the Jhalawar factory sell off deal would be used to clear the rest of the dues.
"We have cleared workers' dues and also of the banks and financial institutions. Approximately 80-90 per cent of the dues are paid off. Still we need to pay another Rs 30-40 crore," the official said.
JK Synthetics is still listed at the BSE but its price is languishing at around Rs 6.50.
In the July-September 2005 quarter, it had registered a total income of Rs 83.2 lakh and a net loss of Rs 96. 2 lakh.