The stake of the financial institutions will, however, remain unchanged as 70 per cent of CCPS, held by FIs, will be converted into redeemable preference shares and the balance 30 per cent will be translated into equity. The promoters, on the contrary, will convert 75 per cent of CCPS into equity and the balance into redeemable preference shares. However, the public's stake will come down to 25 per cent from 35 per cent. The cut-off date for the conversion has been fixed as September 30. Conversions will lead to an increase in the company's equity from Rs 6 crore to Rs 18 crore.

Financial institutions have recently approved a proposal to this effect.

"Institutions have recently approved our restructuring plan and is waiting for the approval of banks. The company is expecting afavourable response from banks, too,"said sources at Zenith.

Zenith Ltd, which went to the Board for Industrial Finance and Reconstruction (BIFR) four years ago following an erosion in net profit, has just begun to show signs of a turnaround following the pragmatic policies of the management.

Though the company has posted a net profit of Rs 3 crore for the first quarter of the current fiscal, the BIFR is yet to pass an order declaring it out of sickness. The major factor behind the turnaround was the encouraging performance of the chemical division and a strategic restructuring, which included the centralising of all marketing activities. It recently brought all its marketing activities under one roof to prevent duplication of efforts. The chemical division, which is into the manufacture of dye-intermediates, has a capacity to produce 300 tonnes per annum. The company's chemical plant is located at Tarapore in Maharashtra.