UK-based British American Tobacco (BAT), the biggest shareholder of ITC Ltd, is planning to divest its holding in the newly spun-off entity ITC Hotels by 2026. The company currently owns a 15 per cent stake in ITC Hotels, BAT stated in its results release. During its FY24 earnings call, the company CEO Tadeu Marroco stated that it has no intention of becoming a long-term shareholder in a hotel chain in India. “We have no interest in becoming a long-term shareholder of a hotel chain in India,” he said.
In 2024, the Group had sold 436,851,457 ordinary shares held in ITC Ltd in India. The sale represents 3.5 per cent of ITC’s ordinary shares. The Group realised net proceeds of £1,577 million, with a net credit of £1,361 million recognised in the year. The gain has been treated as an adjusting item. The sale of stakes in ITC enabled the company to restart its share buyback program in response to the preferences of several major shareholders. “On 18 March 2024, the company announced its intention to start a sustainable share buy-back programme with £700 million worth of shares to be purchased in 2024 and £900 million in 2025. The total number of shares repurchased during 2024 as part of the share buy-back programme was 27,392,429 ordinary shares. Total consideration for the repurchase of shares was £698 million, and was recorded within retained earnings, BAT said in its earnings filing.
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Following the stake sale in ITC as a result of ITC issuing ordinary shares under its Employees Share Option Scheme, BAT’s share of the India-based conglomerate reduced from 29.02 per cent (31 December 2023) to 25.45 per cent at 31 December 2024, currently valued at approximately $15 billion.
Earlier in July 2023, ITC had announced a proposed demerger of its ‘Hotels Business’. The restructuring will see ITC retain a 40 per cent stake in its hotel business, with the remaining 60 per cent will be directly held by shareholders through a rights entitlement. In January 2025, ITC Hotels Limited was listed and commenced trading on the National Stock Exchange of India (NSE) and Bombay Stock Exchange (BSE).
Shares of ITC Hotels went down by 4.12 per cent at 1:30 pm to a trading price of Rs 162.90.
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