The Cement Corporation of India Ltd (CCIL) has initiated processes for the sale of one of its non-operating plants — Nayagaon Cement Factory — and invited bids from buyers.According to the Preliminary Information Memorandum (PIM) for the proposed sale, CCIL has invited expressions of interest (EoI) from potential investors interested in acquiring the non-operating unit in Madhya Pradesh. Entities, joint ventures or consortia with a minimum net worth or asset under management of Rs 200 crore in the financial year 2017-18 can submit EoIs by April 16, 2019, said the firm.
While the Nayagaon Cement Factory has remained non-operational since June 30, 1997, the mining lease of the firm is valid till February 15, 2024 and May 14, 2031 for Nayagaon Mine and Kherarathore Mine, respectively. This would be valuable to any bidder, say experts. Its total liabilities as on stood at Rs 27.3 crore at FY18.
CCIL has been trying to disinvest its non-operating companies as part of its strategic divestment plans. “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. 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,” the PIM said.
CCIL presently operates cement units at Rajban (Himachal Pradesh), Bokajan (Assam) and Tandur (Telangana). It has closed down units located at Mandhar (Chhattisgarh), Kurkunta (Karnataka), Akaltara (Chhattisgarh), Charkhi and Dadri (Haryana), Adilabad (Telangana), Nayagaon (Madhya Pradesh), and grinding units at Delhi and Bhatinda.