Hotels-to-cigarettes conglomerate ITC Ltd is planning to list its hotels business in 2024, said a report on Saturday.
The conglomerate is slated to hold its next board meeting on August 14 where the next course of action is likely to be discussed, reported The Economic Times.
The Board of ITC Limited granted in-principle approval for the demerger of the hotels business under a scheme of arrangement, the company said in a regulatory filing on July 24.
The intimation sent by ITC Ltd stated that appropriate announcements and public disclosures in accordance with the Securities and Exchange Board of India’s (Sebi) listing regulations and other applicable laws will be made as necessary.
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.
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“After due consideration, the Board accorded its in-principle approval to the demerger of Hotels Business under a scheme of the 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,” ITC said.
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 in its exchange filing.
ITC Hotels has over 120 hotels spanning 11,600 keys across over 70 locations in its portfolio, under six brands namely ITC Hotels, Mementos, Welcomhotel, Storii, Fortune and WelcomHeritage.
ITC’s Hotel business, merged with the company in 2004, registered CAGR of 11 per cent over the last couple of decades. During this period, ITC expanded room keys by 2.6 times. For FY23, the division reported revenue of Rs 2,570 crore (4 per cent of ITC revenues), Ebitda of Rs 830 crore (3 per cent of ITC Ebitda) while capital employed stood at Rs 5,600 crore (12 per cent o ITC’s capital employed).
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