ITC is a company in the FMCG sector.
It is also a big name in the hotel business.
The board has given in-principle approval to the separation.
New Delhi. ITC, a group involved in business ranging from cigarettes to hotels, said on Monday that it will separate its hotel business and for this it will form a wholly owned subsidiary ITC Hotels. The company said that with the growth of the hotel business, it is ready to move forward on its own as a separate entity in the fast-growing hotel sector.
ITC said in a notice to the stock market, “ITC Ltd. The Board of Directors in its meeting held on July 24, 2023 assessed and discussed various alternative structures for the hotel business. After due deliberations, the board of directors has given in-principle approval for demerger of the hotel business under the plan of arrangement (agreement between the company and the shareholders or creditors for restructuring the business of the company).”
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Approval was also given for the formation of subsidiary unit.
The Board of Directors has approved wholly owned subsidiary ITC Hotels Ltd. Also approved the formation of This subsidiary will take care of the hotel and related business of the group. ITC said the company will hold about 40 per cent stake in the new entity and the remaining about 60 per cent will be held by the company’s shareholders. It will be in proportion to their stake in the company. The arrangement plan will be placed in the meeting of the Board of Directors to be held on August 14, 2023 for approval.
Sanjeev Puri, Chairman, ITC Limited, said, “The formation of a hotel focused entity will help drive growth and value creation by tapping opportunities in the Indian hotel and related industry. Both ITC and the new entity will continue to benefit from institutional synergies in the proposed restructuring.” The demerged entity will help attract suitable investors and strategic partners, the company said. Please tell that ITC Hotels was started in 1975. The company has 120 hotels in more than 70 locations.
The market may not have liked this method of division of shares in the restructuring. After this news, the shares of the company are seen falling. On Tuesday, the shares of ITC fell by more than 2 per cent and closed around Rs 461.
(with language input)
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FIRST PUBLISHED : July 25, 2023, 15:39 IST