ITC board gives in-principle nod for demerger of hotels business; stock falls over 3%
ITC Hotels. “After due consideration, the Board accorded its in-principle approval to the demerger of Hotels Business under a scheme of arrangement, with the Company holding a stake of about 40% in the new entity and the balance shareholding of about 60% to be held directly by the Company’s shareholders proportionate to their shareholding in the Company," ITC said in a regulatory filing.
The scheme of arrangement shall be placed for approval of the Board at its next meeting to be convened on August 14, 2023, it added. ITC Hotels group has over 120 hotels and 11,600 keys across 70+ locations.
The Board noted that the company’s Hotels Business has matured over the years and is well poised to chart its own growth path as a separate entity in the fastgrowing hospitality industry with sharper focus on the business and an optimal capital structure, whilst continuing to leverage ITC’s institutional strengths, brand equity and goodwill. According to the cigarette-to-hotels conglomerate, the demerger will unlock value of the Hotels Business for the Company’s shareholders by providing them a direct stake in the new entity along with an independent market driven valuation thereof. “Creation of a hospitality focused entity will engender the next horizon of growth and value creation by harnessing the exciting opportunities in the Indian hospitality industry. In the proposed reorganization, both ITC and the new entity will continue to benefit from institutional synergies," said Sanjiv Puri, Chairman of ITC Ltd.
At 2:35 pm, the shares of ITC were trading 3.04% lower at ₹474.95 apiece on the BSE. Catch Live Market Updates here (This is a developing story.
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