Cement Corporation of India Ltd (CCIL) has initiated the process of sale of one of its non-operating units Nayagaon Cement Factory and has invited bids from potential buyers.

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 their Expression of Interest (EoI) by April 16, 2019.

As per the Preliminary Information Memorandum (PIM) for the proposed sale placed on the website of the Department of Investment and Public Asset Management (DIPAM), CCIL has invited EoIs from potential investors interested in acquiring the non-operating unit located at Nayagaon in Madhya Pradesh.

Although 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.

The total liabilities of Nayagaon Cement Factory as at March 31, 2018, stood at Rs 27.3 crore, with similar quantum of total assets.

The non-operating units of CCIL are to be disinvested first as part of the strategic disinvestment of the company.

Established in January, 1965, CCIL is 100 per cent owned by the government. It was established with the objective of setting up cement factories to help achieve self-sufficiency in cement production.

"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).

The company 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 (Punjab).

To start with, the government is planning to first divest seven non-operating units and the non-commissioned unit of Bhatinda and thereafter take up divestment of its operating units.