ITC Ltd is currently working on separating its hotel business into a distinct entity. On Thursday, the company announced that its board has approved the consolidation of its shareholding in rival hospitality chains Oberoi and Leela. This will be done by acquiring shares from its wholly-owned subsidiary, Russell Credit Ltd.
The board has sanctioned the purchase of 1.52 crore equity shares of Rs 2 each in EIH Ltd and 34.60 lakh equity shares of Rs 2 each in HLV Ltd from Russell Credit Ltd. This acquisition will be at their respective book values, according to ITC’s regulatory filing. EIH Ltd operates under brands like Oberoi and Trident, while HLV Ltd manages luxury properties under the Leela brand.
Shareholding Consolidation
ITC aims to consolidate its shareholding in EIH and HLV under the company through this acquisition. After completing these transactions, ITC’s total shareholding in EIH will rise to 16.13 per cent, and in HLV, it will increase to 8.11 per cent. Currently, ITC holds a 13.69 per cent stake in EIH, with Russell Credit Ltd holding an additional 2.44 per cent.
In HLV Ltd, ITC presently owns a 7.58 per cent stake. The company also announced that its board has approved acquiring the entire share capital of Greenacre Holdings Ltd from Russell Credit Ltd at book value. Greenacre Holdings is an unlisted company and a wholly-owned subsidiary of Russell Credit Ltd.
Hotel Business Demerger
The acquisitions are contingent upon receiving relevant approvals from the Board of Directors of Russell Credit Ltd. ITC is progressing with demerging its hotel business into a separate entity. Earlier this year, in June, ITC shareholders overwhelmingly supported this move with a 99.59 per cent vote in favour of creating a new entity for ITC Hotels.
A newly formed wholly-owned subsidiary, ITC Hotels Ltd, will manage the company’s hotel and hospitality operations. Established in 1975, ITC’s hotel segment boasts over 140 luxury properties across more than 90 locations. It operates under six brands: ITC Hotels, Mementos, Welcomhotel, Storii, Fortune, and WelcomHeritage.
This strategic move aligns with ITC’s broader goals to streamline its operations and focus on core areas by creating a dedicated entity for its hotel business.
Original news source Credit: www.goodreturns.in
You must be logged in to post a comment Login