ITC consolidates stake in Oberoi and Leela chains

25 Oct 2024 , 12:36 PM

The board of ITC Ltd, which is currently demerging its hotel sector, authorized the consolidation of its stake in competing hospitality chains Oberoi and Leela on Thursday. To do this, the business will buy shares from Russell Credit Ltd. (RCL), a wholly-owned subsidiary.

A regulatory filing states that ITC will pay RCL book value for 34.60 lakh equity shares of HLV Ltd, the operator of Leela Hotels, and 1.52 Crore equity shares of EIH Ltd, the company that owns the Oberoi and Trident brands. After the deal, ITC will own 16.13% more shares in EIH and 8.11% more shares in HLV.

RCL currently owns 2.44% and 0.53% of EIH and HLV, respectively, whereas ITC currently owns 13.69% and 7.58% of both companies.

Furthermore, the purchase of Greenacre Holdings Ltd., an unlisted and fully-owned subsidiary of RCL, at book value was authorized by the board of ITC. The Board of Directors at RCL must give its approval for these acquisitions.

The action was taken as ITC gets ready to decommission its hotel division into ITC Hotels Ltd., a new company that would oversee 140 upscale establishments under six names, such as Fortune, Welcomhotel, and ITC Hotels. In June 2024, the demerger was overwhelmingly supported by shareholders.

At around 11.53 AM, ITC was trading 3.74% higher at ₹489.35, against the previous close of ₹471.70 on NSE. The counter touched an intraday high and low of ₹493.50, and ₹474.20, respectively.

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