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ITC to hold meeting of ordinary shareholders on June 6 to approve hotels demerger
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
The meeting of the ITC’s ordinary shareholders has been scheduled for 10.30 am and will be conducted through electronic mode.
ITC will host a meeting of its ordinary shareholders on June 6, 2024, to vote on the proposed scheme to demerge ITC Hotels from ITC Ltd into a separately listed subsidiary. The meeting has been scheduled for 10.30 am and will be conducted through electronic mode.
“…as directed by the Hon’ble National Company Law Tribunal, Kolkata Bench, vide Order dated 22nd April, 2024 which was received by us today, a Meeting of the Ordinary Shareholders of the Company will be convened on Thursday, 6th June, 2024 at 10.30 a.m. (IST) through electronic mode for the purpose of considering, and if thought fit, approving the proposed Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors,” the cigarettes-hotel-FMCG conglomerate said in an exchange filing.
The board of ITC had cleared the proposal to demerge its hotel business last August, with an initial timeline suggesting 15 months for the listing of ITC Hotels as an independent hospitality-focused listed entity.
As per the scheme of the arrangement, shareholders of ITC will get one share of the hotel business for every 10 shares they hold in the company.
ITC Chairman & Managing Director Sanjiv Puri told CNBC-TV18 in an exclusive interaction that he does not foresee a significant need for capital raising in the soon-to-be-demerged hotel business.
ITC’s hotels business contributed to nearly 5% of the combined revenue and EBIT over the last decade but more than 20% of the company’s capex in the past. The EBIT margin for the hotels business for financial year 2023 was at a decade-high of 21%.
In a separate development last week, ITC Infotech India Ltd, a wholly-owned subsidiary of ITC Ltd, on Thursday entered into a share purchase agreement for the acquisition of 100% of the share capital of Blazeclan Technologies for a total cash consideration of ₹485 crore.
On January 29 earlier this year, ITC reported a 10.8% year-on-year (YoY) increase in net profit at ₹5,572.1 crore for the third quarter that ended December 31, 2023. The Hotels segment revenue and PBIT surged 18% and 57% year-on-year, respectively. Segment EBITDA margin climbed 470 bps year-on-year to 36.2% driven by higher RevPARs (revenue per available rooms), structural cost interventions, and operating leverage. The stock exchanges have given their no-objection to the scheme of arrangement for demerger.
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