According to a report from Tobacco Insider on December 17th, ITC has announced that the split of its hotel business will take effect on January 1st, 2025. With the National Company Law Tribunal (NCLT) Kolkata Bench approving the arrangement between ITC, ITC Hotels, and their respective shareholders and creditors, all necessary approvals for the split are now in place.
According to the proposed spin-off plan, ITC will retain a 40% ownership stake in ITC Hotels, with the remaining 60% to be held directly by ITC shareholders. Following the completion of the spin-off, British American Tobacco (BAT) will hold a direct 15% stake in ITC Hotels, which could be independently valued at between $23 to $28 billion. Therefore, BAT's direct stake in ITC Hotels is estimated to be worth around $4 billion.
It is expected that BAT will quickly sell its stake in ITC Hotels and use the proceeds to expand the scale of its planned $1.1 billion stock buyback program slated for 2025 (funded by the sale of approximately 3.5% of ITC shares in March 2024).
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