New Delhi: The Cement Corporation of India Ltd (CCIL) has begun procedures to sell off Nayagaon Cement Factory, one of its non-operating units, and has invited bids from buyers. CCIL has called for expressions of interest (EoI) from possible investors keen on acquiring the non-operating unit, which is located in Madhya Pradesh, says the Preliminary Information Memorandum (PIM) for the proposed sale.
CCIL says only entities, consortia or joint ventures with a minimum net worth or asset under management of Rs 200 crore in this fiscal can submit EoIs by April 16.
The Nayagaon unit has been defunct since 1997, although the mining lease of the firm is valid till February 15, 2024 for Nayagaon Mine and till May 14, 2031 for Kherarathore Mine. Experts said this unit would be valuable to any bidder. The total liabilities of the plant stood at Rs 27.3 crore at FY18.
"With these objectives, CCIL had set up its units at locations which were ill-equipped in terms of adequate infrastructure facilities. As a result, CCIL had to make provisions for even the basic facilities at the units," the PIM said.
"These social costs resulted in over-capitalisation of the units and led to higher cost of production of cement as compared to industry standards. This eventually affected the performance and profitability and its net worth was eroded."
At present, the firm runs cement plants at Bokajan (Assam), Tandur (Telangana) and Rajban (Himachal Pradesh). It has closed down units at Kurkunta (Karnataka), Mandhar (Chhattisgarh), Charkhi and Dadri (Haryana), Akaltara (Chhattisgarh), Nayagaon (Madhya Pradesh), and Adilabad (Telangana), along with grinding units at Delhi and Bhatinda.