ITC sets January 1, 2025 as effective date for demerger of hotel business | Company Business News

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ITC Ltd on Tuesday said that the company has fixed January 1, 2025, as the effective date for demerger of its hotel business after receiving an approval order from the National Company Law Tribunal (NCLT). ITC share price gained over a percent to 475.00 apiece on the BSE after the announcement.

In a stock exchange filing, ITC Ltd said that the Kolkata Bench of the National Company Law Tribunal (NCLT) had sanctioned the scheme of arrangement between ITC Ltd., ITC Hotels Ltd., and their respective shareholders, earlier this October.

“The Company has received a certified copy of the Order dated 4th October, 2024 issued by the Hon’ble National Company Law Tribunal, Kolkata Bench, sanctioning the Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors under Sections 230 to 232 read with the other applicable provisions of the Companies Act, 2013 (Scheme); copy of the said order was received by the Company on 16th December, 2024 at 5.26 p.m,” ITC said in an exchange filing.

ITCs’ hotels business demerger was approved by shareholders in June 2024, with 99.6% of public institutions and 98.4% of public non-institutions voting in favor of the proposal.

Following the demerger, ITC will retain a 40% stake in the new entity, with the remaining 60% directly held by shareholders proportionate to their shareholding in the Company. ITC will charge a nominal royalty fee to the hotels entity for the usage of its brand.

As per the ITC demerger ratio, the shareholders of ITC will receive 1 equity share of ITC Hotels for every 10 equity shares of ITC held by them.

Additionally, in October, the cigarette-to-hotel conglomerate ITC consolidated its holdings in hospitality chains Oberoi (EIH Ltd) and Leela (HLV Ltd). ITC will acquire shares currently held by its wholly-owned subsidiary, Russell Credit Ltd. (RCL), as part of the realignment.

ITC presently holds a 13.69% stake in EIH and 7.58% in HLV, while RCL owns 2.44% and 0.53% stakes in EIH and HLV, respectively.

ITC stock price has risen over 5% in six months and more than 12% year-to-date (YTD). ITC shares are still down over 10% from its 52-week high.

At 12:40 PM, ITC shares were trading 0.64% higher at 473.05 apiece on the BSE.

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