ITC shares to gain focus as meeting of ordianary shareholders scheduled on June 6 for demerger approval

ITC shares will gain traction in Thursday’s trade (April 25) as the company’s board meeting is to be held on June6 for considering the proposed Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited. This is primarily for the demerger of the company’s hotel business from itself.ITC shares to gain focus as meeting of ordianary shareholders scheduled on June 6 for demerger approval

The company in the exchange filing said that, “as directed by the Hon’ble National Company Law Tribunal, Kolkata Bench, vide Order dated 22nd April, 2024 which was received by us today, a Meeting of the Ordinary Shareholders of the Company will be convened on Thursday, 6th June, 2024 at 10.30 a.m. (IST) through electronic mode for the purpose of considering, and if thought fit, approving the proposed Scheme of Arrangement amongst ITC Limited and ITC Hotels Limited and their respective shareholders and creditors.”

The company’s board on 24th July, 2023 accorded in-principle approval to demerge the Hotels business of ITC into a new entity. It will be a wholly owned subsidiary to start with and will be listed thereafter pursuant to the scheme of demerger.

The rationale behind the demerger as cited by the company is that the Hotels Business of ITC has matured over the years and is well poised to chart its own growth path.

The company said that as part of the demerger, for every 10 ordinary shares of ITC Limited having a face value of Re 1, one equity share of ITC Hotels Limited bearing a face value of Re 1 will be issued.

"For every ten ordinary shares of the face and paid-up value of Re 1 each held in the demerged company (ITC Ltd), one equity share of the face and paid-up value of Re 1 in the resulting company (ITC Hotels) will be issued," the company said.