ITC Limited announced the transfer of Rs 1,500 crore in cash and cash equivalents to ITC Hotels, the demerged hospitality entity, to support growth initiatives and address contingency requirements. This transfer, along with related assets and trademarks, will be executed before January 1, 2025, the effective date of the demerger.
In an investor presentation on December 30, ITC said ITC Hotels would invest 8-10% of its revenue on capital expenditure for renovations, ongoing projects, and new greenfield developments. The demerged hotel business also proposes to leverage selective inorganic growth opportunities through alliances that add value to the company.
ITC Hotels will, therefore, acquire a debt-free company with cash-generating operations and, therefore, a sound platform for accelerating growth. The company said the employees associated with the hotel business would be transferred to ITC Hotels without compromising on their terms of employment.
All investments in hospitality-related entities under the Hotels Business of ITC are being transferred to ITC Hotels. However, financial stakes in EIH, HLV, and non-operating investments, such as Logix Developers, would remain with ITC Limited as per the demerger scheme.
Additional development involves a deal between ITC Hotels and ITC Ltd. where both firms signed an Operating Service Agreement in running the hotel, ITC Grand Central in Mumbai. Post-demerger, ITC Hotels will issue equity shares directly to ITC shareholders. Shareholders of the company would own 60% of ITC Hotels, while ITC Limited would retain 40% of it. The Record Date for determining the eligible shareholders of ITC Ltd for a share in ITC Hotels is January 6, 2025.
Do you have a news tip for Lakshmishree reporters? Please email us at media@lakshmishree.com
Source: Moneycontrol
News Desk
