JK Corp to hive off investment arm, change name to JK Lakshmi Cement

The board of directors of JK Corp, which met yesterday, approved a proposal to demerge the investment division of the company to Ashim Investment Company (AICL) - an existing investment company registered as an NBFC with RBI.

According to a release issued by the company to the BSE today, the demerger is proposed to enable faster growth and development of the cement business.

"As part of the scheme, the existing paid up capital of the company shall be apportioned as under: investment division - Rs 5.53 crore (10%) and JKCL residual (cement business) - Rs 49.76 crore (90%)," the release said.

The existing paid-up capital of AICL of Rs 10 crore is proposed to be reorganised and reduced to Rs 43.5 lakh.

On demerger and transfer of the investment division of the company to AICL, the equity shareholders of the company shall be entitled to receive one fully paid up equity shares of Rs 10 of AICL for every 10 fully paid up equity share of Rs 10 each held in the company, the release added.

The shareholders entitled to receive the paid up equity shares of AICL, shall, alternately, be entitled to receive fully paid-up cumulative redeemable preference shares (CRPS) of AICL in the ratio of 7 fully paid up CRPS of Rs 100 each against the entitlement of every ten fully paid up equity shares of Rs 10 each of AICL.

The board has also decided to change the name of the company from JK Corp to JK Lakshmi Cement, subject to approval of shareholders at the 65th AGM to be held on August 29, 2005.