ITC Shareholders Approve Hotels Business Demerger With 99.6% Majority

ITC Ltd. shareholders approved the demerger of its hotel business with a majority of 99.6%, according to an exchange filing on Thursday.

The resolution for the approval of the scheme of arrangement among ITC, ITC Hotels Ltd., and their respective shareholders and creditors for the proposed demerger of the hotel business has been passed by the members with the requisite majority, the statement said.

Investors, including the government, participated and voted in favour of the demerger.

The cigarettes-to-staples company announced its plans to demerge its hotel business in August 2023 into a separate entity. 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.

The voting comes after the demerger move was opposed by a 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.

Shares of ITC recovered from the day's low moments after the announcement to end 1.4% higher at Rs 436.40. That compared with 0.9% gains in the country's benchmark NSE Nifty 50.