ITC Stake In Several Arms, Associate Firms And JVs To Pass On To ITC Hotels Upon Demerger

ITC Ltd. on Monday said that its stakes in several of its subsidiaries, associate companies, and joint ventures will "stand transferred" to ITC Hotels Ltd., following the demerger of the hospitality business from itself.

According to the exchange filing, with the demerger becoming effective from Jan. 1, 2025, the entire shares held by the company in them will be transferred to its newly-formed subsidiary ITC Hotels.

Among these companies are wholly-owned subsidiaries Fortune Park Hotels Ltd., Bay Islands Hotels Ltd., Landbase India Ltd., and WelcomHotels Lanka Pvt. This also covers Srinivasa Resorts Ltd., a subsidiary of ITC in which holds 68% stake.

ITC will also transfer its shares in International Travel House Ltd. and and Gujarat Hotels Ltd.—both associate firms in which it holds 48.96% and 45.78% stakes, respectively.

ITC's stake in its an equal partnership joint venture Maharaja Heritage Resorts Ltd. will also be transferred to ITC Hotels, according to the filing.

As part of the demerger plan, the hotels arm of ITC will receive Rs 1,500 crore in cash and cash equivalent at the time of demerger, the company has said on eve of the demerger.

Under the deal, ITC will have 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 ITC Hotels for every 10 shares held in ITC. The company has set Jan. 6, 2025, as the record date for eligibility of shares of ITC Hotels.

According to the scheme of arrangement, ITC Hotels will have an equity of 207.84 crore shares of Rs 1 face value, thereby aggregating to an equity capital of Rs 207.84 crore.

Earlier this month, the company had informed via stock exchange filings that it had received a certified copy of the order issued from the National Company Law Tribunal's Kolkata bench sanctioning its demerger scheme.

Shares of ITC on Tuesday closed 1.37% higher at Rs 483.65 apiece on the BSE, compared to a 0.14% decline in the benchmark Sensex.