The newly formed entity, ITC Hotels, will have a strong debt-free balance sheet which will help it raise capital of its own through equity and debt after the proposed demerger of the hotels business, ITC Ltd Chairman and Managing Director Sanjiv Puri said.
Addressing the shareholders meeting of ITC Ltd, convened to obtain necessary approval for the proposed demerger of the diversified conglomerate’s hotels business into ITC Hotels, Puri stated that the new entity would possess a net worth of approximately INR 10,000 crore. Currently, ITC Hotels operates as a wholly-owned subsidiary of ITC Ltd.
Puri emphasized, “With a robust debt-free balance sheet and a net worth nearing INR 10,000 crore, ITC Hotels will be well-positioned to tap into the debt and equity markets for capital should the need arise in the future.”
Puri said, “The goal of the proposed demerger is to give present shareholders access to the full potential of ITC’s hotel sector. This will be accomplished by means of an impartial, market-driven assessment of ITC Hotels, providing shareholders with the choice and flexibility to hold onto their investment in a concentrated, publicly traded hospitality company. Additionally, the organisations’ cross-synergies will guarantee that ITC’s stockholders continue to get value creation.”
Listing and Trading of ITC Hotels Equity
As per the scheme, all equity shares of ITC Hotels will be listed and/or admitted for trading on both the NSE and BSE.
On August 14, the board of directors of the company, known for its diverse range from cigarettes to soap, gave the green light to the proposed demerger of the hotel business into an independent entity.
Continue Exploring:Â ITC board approves hotel business demerger, expects ROCE to improve significantly
ITC shareholders on Thursday approved the conglomerate’s plan to carve out its hotels business with a significant majority. According to a stock exchange filing, around 99.6 per cent of the votes were in favour of the demerger resolution.
Puri emphasized, “ITC Hotels will persist in harnessing numerous institutional advantages of ITC, encompassing its esteemed corporate brand, internationally recognized sustainability achievements, skilled workforce, digital prowess, and robust governance systems. Additionally, ITC Ltd will extend enduring stability and strategic backing to ITC Hotels, fostering confidence among stakeholders, including business partners and employees. We are confident that this approach will lay a solid groundwork for accelerated growth.”
The hotels business encompasses more than 135 properties spanning across 80 locations under various brands, including ITC Hotels, Mementos, WelcomHotels, Storii, Fortune, and WelcomHeritage, with a total of over 12,500 keys. Over the past 24 months, it has expanded its portfolio by incorporating 24 new properties.
On Thursday, the ITC Ltd stock concluded the trading day at INR 435.80 per share on the BSE, marking a 1.28 percent increase from the previous day’s closing price.
Continue Exploring: BAT to stay off ITC Hotels’ board amid demerger plans
