The board of ITC on August 14 has approved the demerger of the hotels business, with an indicative timeline of listing of the new entity in about 15 months. The hotels business will have the license to use the ITC brand name.
The Board at its meeting held today subject to necessary approvals, considered and approved the demerger of the hotels business under a scheme of arrangement amongst ITC and ITC Hotels and their respective shareholders and creditors under Sections 230-232 and other applicable provisions of the Companies Act, 2013, the company said in a regulatory filing.
Also Read | ITC Q1 results: Net profit jumps 17.58% to Rs 4902.74 crore, revenue falls 7%, exceeds estimates
Under the demerger, shareholders will get one share of hotels business for every 10 shares held in ITC. ITC shareholders are to hold about 60 percent direct stake in ITC Hotels (proportionate to their stake in ITC) and the remaining 40 percent stake to continue with ITC. No cash consideration is payable under the demerger scheme.
The company said that 100 percent economic interest will continue to be held by ITC shareholders in the hotels business.
ITC's hotel business includes owning, licensing, operating, managing, servicing, marketing, accommodating and supervising the operations of hotels along with dining and banqueting services. The turnover of the hotel business for FY23 stood at Rs 2,573.22 crore, representing 3.7 percent of the total standalone turnover of the company FY23.
Over time, this business has grown and is ready to operate independently in the booming hospitality sector yet benefiting from ITC's strong reputation. The increasing aspirations of society, India's solid economic base, government focus on travel and tourism, infrastructure development, and fast-paced digitalization offer great prospects for the Hotel Business's future growth, the company said in an investor presentation.
Also Read | ITC gets green signal from board for planned demerger of hotels business
The company has announced that properties, assets, investments, employees, liabilities and contracts forming part of the Hotels business to be transferred to the new entity. Intellectual property / trademarks exclusively used in Hotels Business will also be transferred. ITC Hotels to be given a license to use the ‘ITC’ name as part of its corporate name & some of its properties / brand names, subject to customary conditions.
The Resulting Company is proposed to be listed on the BSE Limited and the National Stock Exchange of India Limited.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
