BAT to sell 3.5% in ITC on Wednesday, may raise up to ₹17,480 crore
₹17,484 crore ($2.11 billion). BAT, which holds over 29% in the cigarettes-to-hotels conglomerate, will sell the shares at ₹384–400.25 each, implying a 4–5% discount to ITC’s Tuesday closing price of ₹401.90 on the NSE. ITC shares fell 1.83% earlier in the day, while the benchmark Nifty index closed unchanged.
The lock-in period for the deal is 180 days, according to a term sheet seen by Mint. “With this transaction, BAT can accelerate the start of a sustainable buyback, while enabling us to continue to deleverage towards a new target range of 2–2.5X adjusted net debt/adjusted Ebitda," said Tadeu Marroco, chief executive of BAT. He added that BAT looks forward to remaining important shareholders in ITC as it continues its journey of growth.
BAT had net debt of approximately over $53 billion, Mint reported on 14 February. The British multinational also said that ITC is a valued associate of BAT in an attractive market with long-term growth potential where BAT benefits from exposure to the world’s most populous market. BofA Securities India Ltd and Citigroup Global Markets India Pvt.
Ltd are the book runners for the deal. Mint had reported about the impending announcement on Tuesday. BAT said its wholly owned subsidiary Tobacco Manufacturers (India) Ltd intends to sell up to 436,851,457 shares in ITC to institutional investors in an accelerated bookbuilding process.
After the sale, BAT will remain a significant shareholder of ITC, with a 25.5% holding. The company had told investors on 9 February that its shareholding will not fall below 25%. As of the end of December 2023, BAT’s subsidiaries—Rothmans International Enterprises Ltd, Myddleton Investment Co.
Read more on livemint.com
