New Delhi: Leading conglomerate ITC Monday said it will demerge its hotel business by incorporating wholly-owned subsidiary ITC Hotels Ltd.
“The Board of Directors of ITC Ltd at its meeting held July 24, 2023, evaluated and discussed various alternative structures for the Hotels Business. After due consideration, the Board accorded its in-principle approval to the demerger of Hotels Business under a scheme of arrangement,” the company said in a regulatory filing.
Its board has also approved the incorporation of the wholly-owned subsidiary ITC Hotels Ltd, which will handle its hotels and hospitality business, it added.
“… With the company holding a stake of about 40 per cent in the new entity and the balance shareholding of about 60 per cent to be held directly by the company’s shareholders proportionate to their shareholding in the company,” it added.
The scheme of arrangement shall be placed for approval of the board at its next meeting to be convened August 14, 2023.
“The proposed reorganisation would ensure continued interest of the company in the hospitality business, provide long-term stability and strategic support to the new entity in its pursuit of accelerating growth and sustained value creation as also enable leveraging of cross synergies between the company and the new entity,” it added.
Launched in 1975, ITC Hotels, India’s premier chain of luxury hotels, has 120 hotels and 11,600 keys across 70-plus locations.
PTI
