British American Tobacco (BAT), which will end up with a significant minority stake in the demerged hotel business of ITC Ltd, is not going to sell its holding at a discount.
The London-headquartered tobacco major is likely to end up with a 14-15 per cent stake in ITC Hotels Ltd when it is spun off from the cigarette-to-foods conglomerate and listed on the bourses, which is likely by the end of the year.
On Wednesday, ITC said in a regulatory filing that a shareholders’ meeting will be held on June 6 to approve the scheme of arrangement amongst the two entities and their shareholders and creditors. BAT has already made it clear that it will exit from the non-core hotels business.
“They (BAT) will surely not sell at a discount,” ITC chairman and managing director Sanjiv Puri said when asked about BAT’s plan to sell its stake in the demerged hotels entity.
In March, BAT sold 3.5 per cent stake in ITC Ltd to raise $2.1 billion while retaining a 25.5 per cent in the company.
“Once the hotel demerger is over, they (BAT) will want to exit from the business. They may appoint a merchant banker to identify buyers who will bid for the stake,” Puri added.
Puri indicated that ITC would not be involved in BAT’s stake sale in the hotels business.