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| ITC can make a killing |
| BSReporter / Mumbai/New Delhi Oct 17, 2009, 00:26 IST |
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Tobacco major ITC could make a killing from its 14.98 per cent stake in EIH. Information available in the company’s annual report suggests that its 100 per cent subsidiary, Russell Credit, acquired the shares at an average cost of Rs 36.20 per share over several years.
Going by Friday’s closing price of Rs 149.70 on the Bombay Stock Exchange, the total value of the shares stands at Rs 881 crore. This means ITC can make a profit of Rs 664 crore if it decides to offload the stake. That’s a return of over 300 per cent.
Though the shares have been bought over several years, ITC disclosed that Russell Credit, had acquired 14.71 per cent of EIH through amalgamation of associate companies, Megatop Financial Services and Leasing, Newdeal Finance and Investment and Peninsular Investments only on June 8 last year.
During financial year 2008-09, Russell Credit acquired another 1.07 million shares at an average price of Rs 153.93 per share of Rs 2 paid-up.
Sources in ITC today said the company is not interested in battling EIH or Analjit Singh for control of the hospitality major and it has no intention of making any counter offer.
“We had given an offer to the Oberoi management that we could work together and develop into a large hotel chain. That would have been a win-win situation for both,” they said, adding the Oberois seem to be more comfortable with Analjit Singh.
“We are now only interested in seeing what best returns we can get,” the sources said.
ITC Chairman Y C Deveshwar declined to comment on whether ITC would sell its stake to Singh.
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