BAT to Divest 3.5% Stake in ITC via Block Trade

New Delhi, March 12: British multinational BAT PLC announced its plans to sell up to 3.5% stake in India's ITC Ltd to institutional investors through a block trade. The company's wholly-owned subsidiary, Tobacco Manufacturers India Ltd (TMI), intends to sell up to 43,68,51,457 ordinary shares in ITC to institutional investors via an accelerated bookbuild process block trade, subject to customary closing conditions.

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Significant Shareholding and Longstanding Relationship

Based on Tuesday's closing price of Rs 404.25 per share, the value of the total ITC shares planned to be sold by BAT is approximately Rs 17,659.72 crore. These block trade shares represent up to 3.5% of ITC's issued ordinary share capital. Following the completion of the proposed block trade, BAT will continue to hold a significant 25.5% stake in ITC.

BAT's initial investment in ITC dates back to the early 1900s, and the two companies share a longstanding and mutually beneficial relationship.

Proceeds Utilization and Future Plans

BAT intends to use the net proceeds from the block trade to buy back BAT shares over a period ending December 2025, commencing with 700 million pounds in 2024. The company will also continue allocating operating cash flow to fund investments in its transformation and further deleveraging.

Confidence in ITC's Growth Potential

BAT Chief Executive Tadeu Marroco expressed confidence in ITC's continued value creation under its current management. He emphasized the company's commitment to remaining a significant shareholder in ITC as it pursues its growth journey.

Strategic Portfolio and Market Exposure

BAT operates in the multi-category consumer goods business, with a strategic portfolio that includes global cigarette brands and a growing range of nicotine and smokeless tobacco products. The company's portfolio encompasses the vapor brand Vuse, heated product brand glo, and Velo, a modern oral nicotine pouch brand.

ITC's Performance and BAT's Support

ITC is recognized as one of India's leading FMCG enterprises, having delivered substantial value for its shareholders. BAT continues to fully support ITC's management team, performance, and strategy.

BAT's decision to sell a portion of its stake in ITC through a block trade reflects its confidence in the Indian market's long-term growth potential. The company's strategic portfolio and commitment to ITC's growth journey underscore the enduring partnership between BAT and ITC.