ITC to transfer Rs 1,500 crore to its demerged hotel unit
ITC Ltd is going to transfer cash and cash equivalent of Rs 1500 crore to its demerged hotel business entity, ITC Hotels, to cater to its planned growth and contingency requirements, as per a shareholder presentation of the Kolkata-based conglomerate. The demerged ITC Hotels will undertake capital investments on renovations and on-going projects at 8-10% of its revenue.
ITC Ltd is also going to retain the trademarks of the popular hotel restaurants such as Bukhara, Dum Pukht and Dakshin which will be given to ITC Hotels under a trademark license agreement, as per the presentation. The ITC trademark and logo will also be shared in the same way.
The hotel business will be demerged on January 1, 2025, and the record date is January 6 for purposes of determining the shareholders of ITC to whom equity shares of ITC Hotels would be allotted pursuant to demerger. The shares of ITC Hotels will be listed within 60 days from the date of receipt of NCLT Order which was on December 16, 2024.
As per the demerger plan, ITC Hotels will issue equity shares directly to the shareholders of ITC Ltd in a manner that about 60% stake is held directly by ITC shareholders proportionate to their shareholding in ITC and remaining about 40% stake to continue with ITC. Hence, overall existing ITC shareholders will hold 100% of ITC Hotels — 60% directly and balance 40% through their shareholding in ITC.
ITC in the presentation said that an operating service agreement will be executed between ITC and ITC Hotels to operate and manage ITC
