British American Tobacco has sold a 9 per cent stake in India’s ITC Hotels for around £315m, completing a block trade announced just a day earlier as the group moves to bring down its debt levels.
BAT said its subsidiaries had placed 187.5 million ordinary shares in the hotel operator with investors through an accelerated bookbuild, representing more than half of the group’s original 15.3 per cent holding. Net proceeds of INR 38.2bn will go towards BAT’s target of reducing leverage to 2–2.5x adjusted net debt to EBITDA by the end of 2026.
The move follows BAT’s announcement on 4 December that it intended to sell between 7 per cent and 15.3 per cent of ITC Hotels’ issued share capital, describing the holding as non-strategic and a legacy of the hotel company’s demerger from Indian conglomerate ITC Limited earlier this year.
ITC Hotels, established in 1975, now operates more than 140 hotels across 90 destinations in the Indian subcontinent.
Chief executive Tadeu Marroco said the sale aligned with BAT’s plans to strengthen its balance sheet, adding: “Our direct shareholding in ITC Hotels was a result of the demerger process that was completed by ITC earlier this year. As previously stated, a direct stake in ITC Hotels is not a strategic holding for BAT.”
Following the transaction, BAT retains approximately 6.3 per cent of the publicly listed hotel business.