Highlights
- BAT to sell between 7 per cent and entire 15.3 per cent stake in ITC Hotels via block deal.
- Proceeds will help company achieve target leverage range of 2-2.5x by end of 2026.
- BAT acquired stake following ITC Hotels' demerger from parent company ITC in January 2025.
The company's wholly owned subsidiaries, Tobacco Manufacturers (India) Limited, Myddleton Investment Company Limited and Rothmans International Enterprises Limited will conduct the block deal with institutional investors.
The final number of shares sold will be determined to optimise overall pricing outcome for the group, BAT said. Funds raised from the transaction will help the company transition to its target leverage range of 2-2.5x adjusted net debt to adjusted EBITDA by the end of 2026.
"As previously stated, a direct stake in ITC Hotels is not a strategic holding for BAT," chief executive Tadeu Marroco said.
"Therefore, I am pleased that the proceeds from this transaction will further support continued progress towards our stated 2026 leverage corridor."
BAT's shareholding in ITC Hotels resulted from the demerger process completed by parent company ITC earlier this year. In May, BAT sold a $1.5 bn stake in ITC Limited, from which ITC Hotels was spun off as a separate listed entity in January.
Established in 1975, ITC Hotels now operates over 140 properties across more than 90 destinations in the Indian subcontinent. The hotel chain's shares were listed on 29 January 2025 at Rs 188 (£1.56) on the BSE and Rs 180 (£1.50) on the NSE, below the Rs 260-270 valuation assigned during a special price-discovery session earlier in January.
ITC Hotels' shares closed flat at Rs 207.80 (£1.73) on the NSE on Thursday. Promoter company ITC holds a 39.85 percent stake in the hotel business.
