ITC Demerger: ITC Hotels To Bag Rs 1,500 Crore Cash At Separation
The hotels arm of ITC Ltd. will receive Rs 1,500 crore in cash and cash equivalent at the time of demerger, the company said on eve of the demerger come into effect on Jan. 1, 2025.
ITC Hotels Ltd. will be demerged from ITC Ltd., with the record date for the company for demerger and the ex-date for the shares of ITC Ltd set at Jan. 6.
To be clear, the shareholders of ITC will get one share of ITC Hotels for every 10 shares they own in the parent. Shareholders should hold shares of ITC on record date i.e. Jan. 6 to be eligible to get shares of the ITC Hotels.
ITC Hotels will file application with stock exchanges for listing its shares and post allotment will be listed by Feb. 14 as per regulatory requirement.
ITC will hold nearly 40% stake in the hotel arm and the remaining will be held by ITC shareholders. It is likely the listing will be well ahead of the deadline as ITC is part of the index and ITC Hotels will continue to be dormant stock in the index till its starts trading.
As part of the scheme of arrangement upon demerger properties, assets, investments, employees, liabilities and contracts forming part of the hotels business will be transferred to ITC Hotels.
In addition, there will be an operating service agreement between ITC and ITC Hotels to operate and manage ITC Grand Central, Mumbai.
The merger will also lead to identified assets such as offices, managerial or staff housing, etc. pertaining to hotels business getting transferred to ITC Hotels. In addition, cash and cash equivalents to the tune of Rs 1,500 crore to cater to planned growth and contingency requirements will also be part of ITC Hotels' balance sheet.
Investments
All investments in hospitality entities forming part of hotels business, will be transferred to ITC Hotels. This list includes Bay Islands Hotels Ltd., Fortune Park Hotels Ltd., Landbase India Ltd., Srinivasa Resorts Ltd., WelcomHotels Lanka Pvt. Ltd., Gujarat Hotels Ltd., International Travel House Ltd., and Maharaja Heritage Resorts Ltd.
The financial invetsments in EIH Ltd. and HLV Ltd. and non-operational investments like Logix Developers Pvt. Ltd. will remain with the parent as per the demerger scheme.
ITC Hotels will have zero debt balance sheet and cash generating operations, the company said. The company will invest 8–10% of its revenue in capital investments every year.
-
'Never Seen This Level Of Negativity': Sandeep Tandon Says The Next Rally May Be Closer Than You Think
Veteran investor Sandeep Tandon says foreign selling is easing, large-caps are due a comeback and mid-caps are crowded, while he turns positive on gold, power and pharma this Diwali.
-
Indians Stay With Family, Not In Hotels | The Reason Why
India still lacks enough clean, reliable and affordable hotels for budget-conscious travellers.
-
The Economic Imperative: Analysing The Material Driving Force Behind India-Canada Strategic Reset
This economic complementarity is further reinforced by deep institutional investment ties and talent mobility, which form the bedrock of the bilateral framework.
-
Medicine Pricing: Where Must Profit Stop?
India must confront excessive margins, hidden incentives and regulatory gaps that threaten the integrity of medicine.
-
Why Amazon And Flipkart Are Struggling To Beat Meesho In India's Smaller Cities
With 274 million users and lowest-cost logistics, Meesho is defending its value commerce crown against giants like Amazon and Flipkart.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
