This will be the second such stake reduction by BAT in ITC after it sold 3.5% stake last year in a similar block deal, generating about ₹16,690 crore.
BAT said post the current block trade deal, it will remain a significant shareholder of ITC with around 23.1% holding.
In a notification to the London Stock Exchange, the UK-headquartered company said its wholly-owned subsidiary Tobacco Manufacturers (India) Ltd will sell the share in ITC. BAT currently owns 25.4% in ITC through three entities – Tobacco Manufacturers (India), Myddleton Investment Company and Rothmans International Enterprises. Tobacco Manufacturers own the majority 20.31% of BAT’s stake.
BAT chief executive Tadeu Marroco in the release said ITC is a valued associate of BAT in an attractive geography with long-term growth potential where BAT benefits from exposure to the world’s most populous market.
“Whilst this transaction supports delivery on our commitments to BAT shareholders, we continue to view ITC as a core strategic component of our global footprint as we partner on business opportunities in India. I am confident that ITC, under the stewardship of its current management, will continue to create further value for its shareholders,” he said.As per some media reports, the proposed deal size of this block trade could be around $1.36 billion and ITC shares will be sold at about ₹400. This could not be independently verified.The announcement was made post local trading hours in India. The ITC scrip fell by 2.01% on the BSE on Tuesday to close at ₹433.9 a piece while the Sensex fell by 0.76%.