JCT's earlier debt restructuring proposal was rejected by the FIs as they failed to reach a consensus over the terms and conditions of restructuring.

Sources in two of the three FIs which have exposure to the company told The Financial Express that they would insist on cash recovery of at least some portion of the total loans outstanding against the company. JCT's outstanding with the FIs and banks is estimated to be over Rs 400 crore.

The FIs led by Industrial Finance Corporation of India (IFCI) have already set strict terms for the company's debt restructuring. The terms include, appointment of concurrent auditors, reconstitution of the board, constitution of an asset sale committee with FI nominees and infusion of Rs 100 crore through an escrow account.

Earlier, the company haddecided to hive off some its real estate properties in Mumbai as a strategy to generate some cash repayment. It even appointed RK Signhal & Co for the purpose. However, owing to a depressed real estate market, the company failed to get a proper price for its proposed sales.

JCT had also put on sale its steel division, which manufactures wire drawing units, and was in talks with Tatas and Jindals. However, with the recession hitting the steel sector, the plans are yet to materialise.

Currently, JCT is expecting over Rs 10 crore from the sale of surplus land at its Phagwara unit. Further, the company is hoping to generating over Rs 20 crore from the sale of its steel division. JCT is, however, believed to have put on hold its plans for selling off its polyester unit.

Meanwhile, the company has finalised a list of three professionals to be inducted in the company's reconstituted board and appointed TR Chaddha & Co as the concurrent auditors.

JCT has also intimated the FIs its inability to infuse Rs 100crore immediately into the company and asked to review the amount as it has already invested Rs 80 crore during 1997-98. The company has also asked the FIs for allowing six months to bring in the fresh funds.

JCT's problem of debt restructuring began with its Rs 400-crore sell-off deal with Indonesia-based Polysindo falling through. The two parties failed to arrive at a conclusion regarding the price, as JCT management refused to agree on a lower amount after Polysindo reviewed the price from proposed Rs 520 crore to Rs 406 crore.