ITC AGM: Chairman Sanjiv Puri on hotels demerger, cigarette and FMCG business

economictimes.indiatimes.com:

ITC's hotel business will sharpen capital allocation, improve asset efficiency ratios, unlock value for its shareholders as well as enable leveraging of institutional synergies, company chairman and MD Sanjiv Puri today said. «The continued interest of ITC in the new entity will provide long-term stability and instill a sense of assurance among partners, investors, and employees while enabling the new entity to leverage ITC’s institutional strengths including the timeless goodwill, world-class brands and governance processes,» Puri told shareholders at the company's annual general meeting (AGM).

The board of the Kolkata-based hotels-to-cigarettes major has already given in-principle approval to the demerger and details of the scheme of arrangement is likely to be announced this Monday following a board meeting to announce the June quarter results. It is expected that ITC Hotels will get listed on stock exchanges in the next 12-18 months following approval from regulators, including NCLT.

«The proposed re-organisation will enable the business to architect the next horizon of growth as a pure play hotels entity with a strong balance sheet and a healthy pipeline, especially when the industry is poised for robust growth,» Puri said.Cigarettes business ITC, which derives 76% of its EBIT from the cigarette business, said it will continue to strengthen the segment by fortifying its product portfolio, innovation, sharpening execution capabilities, and upgrading product quality to reinforce market standing in the face of severe threats from illicit cigarette trade. «It is pertinent to note that legal cigarettes constitute merely 8% of the aggregate tobacco consumption in the country.