ITC will own 40% of the new business, with the remaining 60% held directly by the Company's shareholders in proportion to their investment in the Company. The ITC board of directors has also approved the formation of a wholly owned subsidiary called ITC Hotels.
On 24 July 2023, The board of directors of ITC Ltd. has given in-principle approval for the demerger of its hotel operations and the formation of a wholly owned subsidiary called ITC Hotels.
"Following due consideration, the Board granted its in-principle approval to the demerger of Hotels Business under a scheme of arrangement, with the Company holding a stake of approximately 40% in the new entity and the balance shareholding of approximately 60% to be held directly by the Company's shareholders proportionate to their shareholding in the Company," ITC said in a regulatory filing.
The scheme of arrangement will be presented to the ITC Board for approval at its next meeting on August 14, 2023, it added.
About ITC Hotels
ITC Hotels is a hotel chain established in Gurgaon, India. It is India's sixth largest hotel chain, with approximately 100 hotels. It is a subsidiary of the ITC Limited corporation. It has a franchise deal with Marriott International to run the majority of its hotels as part of The Luxury Collection.
Founded in 1972 as Rama Hotels Pvt Ltd, it was renamed Vishwarama Hotels in 1973. The Vazir Sultan Tobacco Co Ltd. (VST Industries) purchased Vishwarama Hotels in 1980-1981, and the first luxury hotel for the new brand opened in Bangalore in 1982.
On 18 October 1975, ITC Limited joined the hotel sector with the opening of a hotel in Chennai, which was renamed Welcomhotel By ITC Hotels, Cathedral Road, Chennai.
ITC Ltd. purchased VST's whole share capital in 1984. The Indian government bestowed a five-star designation on the hotel that would become the ITC Gardenia in 1985.
In 1986, the corporate name was changed from ITC Ltd. to ITC Hotels.
The ITC Hotels group operates approximately 120 hotels and 11,600 keys in 70+ locations. The ITC board of directors stated that the company's Hotels Business has matured over time and is well positioned to chart its own growth path as a separate entity in the fast-growing hospitality industry, with a sharper focus on the business and an optimal capital structure, while continuing to leverage ITC's institutional strengths, brand equity, and goodwill.
