ITC Announces Shareholders’ Meeting For Demerger Of ITC Hotels- Know Key Date And Other Details (image source: Times Now Digital)
ITC, FMCG giant and conglomerate, has announced plans to convene a meeting of its ordinary shareholders on June 6, 2024, to approve the proposed scheme of arrangement involving the demerger of ITC Hotels from ITC Limited into a separate listed subsidiary. The company made this announcement through an exchange filing on Wednesday.
ITC Share Holders Meeting Details
The meeting is scheduled for 10:30 am India time and will be conducted electronically.
This move follows an order by the National Company Law Tribunal (NCLT) instructing the company to convene a meeting of its ordinary shareholders.
Market Response and Share Price
ITC shares remained unchanged on the National Stock Exchange (NSE) at Rs 429.40 following the announcement, which was made after market hours on Wednesday.
The board of directors had previously approved the scheme of arrangement on August 14. Under this scheme, shareholders of ITC will receive 1 share in the demerged hotels business for every 10 shares held in the parent company.
Upon approval from shareholders, creditors, stock exchanges, SEBI, NCLT, and other regulatory authorities, the demerger is expected to be completed. ITC aims to list the new stock on stock exchanges within 15 months after the demerger.
Shareholding Structure
Following the demerger, ITC shareholders will hold approximately 60% of ITC Hotels, proportionate to their stake in the parent company, while the remaining 40% stake will remain with ITC. No cash consideration is payable under the demerger scheme.
According to ITC, the scheme will unlock value for existing shareholders of the demerged company through independent market-driven valuation of their shares in the resulting company. This will provide shareholders with the option to invest in a pure-play hospitality-focused listed entity.
As part of the demerger, ITC Hotels will be granted a license to use the ‘ITC’ prefix as part of its corporate name and brand name for a royalty fee. The share entitlement ratio has been determined based on the share capital or number of shares of the two companies, independent of ITC Hotels’ market capitalization.
ITC said that its hotel business has matured over the years and is well-positioned to operate as a separate listed entity. The demerger will enable the hotels unit to raise capital for its growth requirements and attract investors aligned with the hospitality industry.
