ITC’s holding in hotel business may offer stability to overall business, says Sanjiv Puri

11 Aug 2023 , 03:02 PM

ITC Ltd chairman Sanjiv Puri stated that the company’s continued participation in the planned demerged hotel business entity is intended to offer stability to the business, reassure stakeholders, and allow ITC to harness institutional strengths to expand its other businesses.

Puri said in a virtual address to shareholders at the company’s 112th annual general meeting on Friday that ITC’s continued interest in the new entity (demerged hotel business) will provide long term stability and instill a sense of confidence among partners, investors, and employees, while enabling the new entity to leverage ITC’s institutional strengths, including timeless goodwill, world-class brands, and governance processes.

The restructuring will improve capital allocation, asset efficiency ratios, unlock value for shareholders, and enable the harnessing of institutional synergies, said Puri for ITC.

According to Puri, as a result of the proposed reorganization, the company will be able to engineer the next horizon of expansion as a pure play hotels firm with a strong balance sheet and a good pipeline, especially at a time when the industry is on the heels of significant growth.

ITC said last month that the company’s board of directors has given preliminary approval to the demerger of the hotels segment. According to the proposed scheme of arrangement, ITC Ltd will control 40% of the new business, with the remaining 60% owned directly by the company’s shareholders in proportion to their investment in ITC Ltd.

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