ITC shares an important update on the demerger of its hotels business – CNBC TV18

ITC Ltd. has informed the exchanges on Tuesday, December 17 that January 1, 2025 will be the appointed and effective date of the demerger of its hotels business.

The exchange filing also said that the Kolkata Bench of the National Company Law Tribunal (NCLT) had sanctioned the scheme of arrangement amongst ITC Ltd. and ITC Hotels Ltd. and their respective shareholders in October this year.

Shareholders of ITC had approved the de-merger of its hotels business in June this year with 99.6% public institutions and 98.4% public non-institutions cast votes in approval of the proposal.

In October this year, ITC had announced the consolidation of its stake in rival hospitality chains Oberoi and Leela. ITC will acquire shares from its wholly-owned subsidiary Russell Credit Ltd. for the same.

ITC currently holds 13.69% in EIH and 7.58% in HLV, while RCL holds 2.44% and 0.53% stakes in EIH and HLV, respectively.

Post the demerger, ITC plans to hold 40% stake in the new entity and the rest of the 60% will be held directly by the shareholders.

ITC had said that it chose to have a 40% holding instead of a vertical split to provide strategic support and synergies with the Hotels business. ITC will also charge a small royalty to the hotels business for brand usage.

Shares of ITC have recovered from the lows of the day and are now trading 0.6% higher at ₹472.9. The stock is 10% away from its recent peak of ₹528.