According to a report from Reuters on March 11th, British American Tobacco (BAT) stated it is assessing the possibility of selling a "small portion" of its stake in Indian company ITC through on-market bulk trading.
The British American Tobacco company announced in February that it is actively working to reduce its stake in the Kolkata-based company by approximately 29%. When the UK company decided to abandon its new buyback plan last year to focus on investing in new products, investors were disappointed, leading to a decline in its stock price.
This equity sale will enable BAT to pay off debt and reach the leverage range required for stock buybacks more quickly. BAT has been in negotiations with Bank of America and Citigroup about the possibility of withdrawing 2 to 3 billion dollars worth of ITC stock through block trades.
In addition, Bloomberg cited sources as saying that the sale of shares could potentially begin as early as this week.
According to reports, ITC is one of India's largest diversified companies, with business operations spanning sectors such as cigarettes, alcohol, hotels, agriculture, information technology, and consumer goods. ITC has a significant influence in India's business industry and also maintains a presence in international markets.
During last month's earnings conference call, British American Tobacco CEO Tadeu Marroco told investors that the cigarette giant aims to maintain a certain level of influence in ITC and would need to hold 25% of the shares in order to have veto power.
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