NEW DELHI, India -- C K Birla Group firm Orient Paper and Industries Limited announced that it will demerge its consumer electric division.

The board of the company, in a meeting, gave "its in-principle approval for the vertical demerger of its consumer electric division", Orient Paper said in a statement.

It further said this will "facilitate both paper and consumer electric businesses to focus on their core competencies and to pursue their independent strategies".

The company would also issue fresh equity in the form of a rights issue worth Rs 50 crore to reduce debt and for general corporate purposes.

"Proceeds from the rights issue shall be used to reduce debt of Orient Paper and for general corporate purposes," said Orient Paper.

The company has appointed a committee of directors to finalize the process of the rights issue.

Orient Paper, which has manufacturing capacity of about 85,000 tonnes of paper, also produces fans, lightings, appliances and switch gears in the consumer electric segment.