 "ITC hotels")
FMCG giant ITC on Monday announced that it had received in-principle approval from the board of directors to demerge its hotel business. Under the new arrangement, a new entity called ITC Hotels Ltd will be incorporated as a wholly-owned subsidiary of ITC Ltd.
ITC will hold a 40 per cent stake in ITC Hotels, and the company's shareholders will hold the remaining 60 per cent proportionate to their shareholding.
"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 company 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 14th August 2023. Appropriate announcements and public disclosures in accordance with the SEBI Listing Regulations and other applicable laws will be made as necessary," it added.
The application for incorporation of ITC Hotels is in the process of being filed and will be completed once the ministry of corporate affairs approves its incorporation.
The company added that the demerger would help the new entity in attracting "appropriate investors and strategic partners/ collaborations whose investment strategies and risk profiles are aligned more sharply with the hospitality industry".
"In addition, it will unlock the 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," it said.
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ITC runs 120 hotels and 11,600 keys across over 70 locations in the country.
On Monday, as of 2:25 pm, ITC was trading 2.17 per cent in the red at Rs 479.20 apiece on BSE.
