ITC approves demerger of hotel business

July 24, 2023 admin Leave a reply Post Comment

ITC board approves demerger of hotel business

Cigarettes-to-hotels major ITC Ltd on Monday said that its board has given in-principle approval for the demerger of its hotels business at its board meeting. The company said it would hold a stake of around 40 per cent in the new entity and the balance will be held by the company’s shareholders proportionate to their shareholding in the company.

“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 per cent in the new entity and the balance shareholding of about 60 per cent to be held directly by the Company’s shareholders proportionate to their shareholding in the Company. The proposed demerger of the Hotels Business is a testament to the Company’s commitment to creating sustained value for stakeholders.” ITC said.

The scheme of arrangement shall be placed for approval of the Board at its next meeting to be convened on August 14, 2023.

To progress the proposed reorganisation as aforesaid, the Board has also approved incorporation of a wholly owned subsidiary (“WOS”) of the company, the filing stated.

Application for incorporation of the wholly-owned subsidiary is in the process of being filed and will be completed once the Ministry of Corporate Affairs approves the same, the company said.

“The 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 reorganisation, both ITC and the new entity will continue to benefit from institutional synergies,” said ITC Chairman and Managing Director Sanjiv Puri.