NEW DELHI: British American Tobacco (BAT), the largest shareholder in ITC, is working towards pairing some of its stake in the cigarette-to-hotel conglomerate.
“We continue to pursue all opportunities to enhance balance sheet flexibility and, as part of this, we regularly review our stake in ITC. We recognise that we have a significant shareholding which offers us the opportunity to release and reallocate some capital,” BAT said in its preliminary results for the year ended 31 December 2023.
BAT’s shareholding in Kolkata-headquartered ITC has existed in one way or another since the early 1900s. “We have been actively working for some time on completing the regulatory process required to give us the flexibility to monetise some of our shareholding and will update you at the earliest opportunity,” added BAT.
BAT chief executive officer Tadeu Marroco said it is very difficult to give a timeline for the stake sale. However, BAT is likely to maintain a 25% plus stake in ITC as it wants to keep a certain level of influence in the company.
“Local regulations require us to keep stake at 25% to have veto rights. Our current stake is above 29% so there is space for us to reduce stake,” Marroco said. He added that the possibility of stake sale comes at a time when the capital cost has risen sharply due to high interest rates.