ITC hotel demerger: The demerger is expected to unlock value through the creation of a pure play hotels entity, which would have a business focus aligned to the specific market dynamics in India.
ITC said the meeting of ordinary shareholders will be convened on Thursday, 6th June, 2024 at 10.30 am IST through electronic mode for considering, and if thought fit, approving the demerger.
Shares of ITC Ltd will be in focus on Thursday morning after the FMCG giant said a meeting of the ordinary shareholders of the company would be convened on Thursday, June 6 at 10.30 am IST for approving the proposed demerger of ITC Hotels.
The demerger is expected to unlock value through the creation of a pure play hotels entity, which would have a stronger business focus aligned to the specific market dynamics in India. The hotel business, analysts said, would operate with an optimal capital structure.
It would have the ability to attract strategic partners focused on the hospitality industry while benefiting from enjoying the strategic synergies with ITC, they said
Stock exchanges have already given their no-objection to the scheme of arrangement for demerger.
“Further to our letter dated 14th August, 2023, we write to advise, pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, that as directed by the Hon’ble National Company Law Tribunal, Kolkata Bench, vide Order dated 22nd April, 2024 which was received by us today, a Meeting of the Ordinary Shareholders of the Company will be convened on Thursday, 6th June, 2024 at 10.30 a.m. (IST) through electronic mode for the purpose of considering, and if thought fit, approving the proposed Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors,” ITC said.
To recall, ITC approved the Scheme of Arrangement between ITC Ltd and ITC Hotels on August 14, 2023. The scheme suggested the issuance of equity shares by the resultant entity to the shareholders of the demerged counterpart. Specifically, for every 10 shares held in ITC Ltd, shareholders would be entitled to receive 1 share of ITC Hotels Ltd. ITC has stated that 100 per cent of the new hotel business will remain under shareholders of ITC. ITC shareholders will receive 60 per cent of the business while the remaining 40 per cent will be held by ITC Ltd.
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