ITC shareholders in their meeting held on Thursday, June 6, approved the demerger of the FMCG giant’s hotel business segment, which has paved the way for the listing of ITC Hotels. With an overwhelming majority, as many as 99.6 per cent of shareholders voted in favour of the move, exceeding the regulatory requirement of a three-fourth majority.
‘’Shareholders of ITC, in a virtual meeting held on Thursday through video conferencing or other audio-visual means, approved the resolution for the scheme of arrangement between ITC Ltd and ITC Hotels Ltd,” said the Kolkata-headquartered firm in a regulatory filing to the stock exchanges.
The meeting was called pursuant to the directions of the Kolkata Bench of the National Company Law Tribunal (NCLT) dated April 22, 2024. ITC, known for its Goldflake brand of cigarettes, announced the demerger plan of its hotel business by incorporating ITC Hotels Ltd as a wholly-owned subsidiary in July 2023.
Later, ITC said that the new entity would be tentatively listed in 15 months. The scheme was approved a month later, in August. The new unit, ITC Hotels of the cigarette-to-hotel conglomerate, will handle the hotel and hospitality business.
Under the scheme of demerger, ITC Hotels will issue equity shares directly to the shareholders of ITC in a manner that about 60 per cent stake is held directly by ITC shareholders proportionate to their shareholding in ITC and the remaining about 40 per cent stake to continue with ITC, according to ITC.
As per the scheme, investments in hospitality entities forming part of the hotel business — 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 — will be be transferred to ITC Hotels.
The hotels business contributed four per cent to ITC’s fiscal year 2024 revenue, while its mainstay consumer staples business made up 71 per cent of the topline. Launched in 1975, ITC Hotels, India’s premier chain of luxury hotels, has over 120 hotels across 70-plus locations. On Thursday, shares of ITC settled 1.28 per cent higher at ₹435.80 apiece on the BSE.
