Group patriarch Basant Kumar Birla told The Financial Express that cement business is not doing well and efforts are on to find an overseas buyer for Manikgarh unit.

"We have been talking to two foreign players. It is too early to spell out the names. An official announcement will be made as soon as the deal is struck," Birla added.

The company has informed the Bombay Stock Exchange on Monday that it has decided in consultation with ICICI Securities that its Manikgarh cement unit (including the power plant) will be sold subject to necessary approvals.

It is learnt that transnationals Blue Circle and Lafarge are in the race to acquire Manikgarh cement, a 1.5 million tonne unit of Mumbai-based Century Textiles. The Birlas have reportedly appointed I-Sec to identify a buyer for the cement unit.

If the deal finally comes through, the BK Birla group will add Rs 500 crore to its kitty with analysts estimating a price of around $75 million per tonne. Hit by rising power costs, Century Textiles-with a total cement capacity of close to five million tonnes from its units at Manikgarh (1.5 million), Raipur (1.2 million tonnes) and Maihar (2 million tonnes)-has been finding it difficult to run the units.

Market sources say that if Lafarge manages to clinch the deal it would pave the way for its entry into the western market after having strengthened its position in the east through the takeover of Raymond's cement division for a whopping Rs 750 crore. The French cement giant had earlier bought out the 1.7 million tonne cement division of Tata Steel for Rs 550 crore.

Century Textiles, which had losses aggregating Rs 91.3 crore for the fiscal 1998-99, has not improved its fortunes significantly during the last fiscal, although it managed a meagre profit of Rs 1.93 crore during September-December 2000.

Analysts say that with its textile division also going through a bad phase due to recession, Century Textiles is finding the going tough as its operating costs account for about 90 per cent of sales.

Andersen Consulting, which was roped in to suggest a recovery path, has advised the company to initiate steps to reduce the cost of power at its cement division.