ITC Ltd. has set Jan. 6 as the record date for determining eligible shareholders who will receive shares in its hotels business after the demerger. This follows the fast-moving consumer goods giant's earlier announcement of Jan. 1 being the effective date of the demerger of ITC Hotels Ltd.
Both companies had mutually acknowledged all the conditions specified in the scheme of arrangement, the former had said in an exchange filing on Tuesday.
The cigarettes-to-staples company had received a nod from the Kolkata bench of the National Company Law Tribunal for the spinoff of its hotels business.
The record date is the latest step in a long-drawn procedure for ITC, which had started with the FMCG giant announcing its plans to demerge the hotel business into a separate entity in August 2023.
Under this demerger scheme, ITC will maintain 40% ownership of ITC Hotels, with ITC shareholders acquiring the remaining 60% in proportion to their stake in the parent entity.
Eligible shareholders will get one share of the ITC Hotels Ltd. for every 10 shares held in ITC Ltd. As per the scheme of arrangement, the new resulting company, ITC Hotels Ltd., will have an equity of 207.84 crore shares of Rs 1 face value, that is, equity capital of Rs 207.84 crore.
The shareholders of ITC approved the demerger with a majority of 99.6%, after a tussle with the domestic proxy advisory firm, Institutional Investor Advisory Services. IiAS had advised shareholders of the firm to vote against the proposed demerger, stating that it only partially unlocks value.
ITC, however, had said that the hotels business has matured over the years and is well poised to chart its own growth path as a separate entity in the fast-growing hospitality industry.
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