Itc May Launch Bat Brands In March

ITC Ltd may go in for the launch of BAT's international brands sometime in March. Negotiations for the sale of the two arms of ITC Classic have also reached a crucial stage, sources said yesterday.

The ITC Ltd board met yesterday, and the meet discussed some pending issues and took stock of the progress on the merger of ITC Classic Finance with ICICI.

According to sources, while it was earlier planned to launch the BAT brands which ITC would produce under a historic licensing arrangement after the 1998-99 Union Budget, there was a possibility that at least one of the brands may be launched sometime in March. ITC is to manufacture State Express 555 and Benson & Hedges under the license agreement with BAT, and market them under its own brand portfolio. No official stand is, however, available on the brands' launch timing from ITC at this point.

 

Following the decision to merge ITC Classic with ICICI, the hunt is also on for a buyer for two of Classic's subsidiaries, Classic Share and Stock Broking (CSSB) and ITC Classic Home Finance. The board yesterday was informed of the progress on the sale front, and a final decision could be expected shortly. The deal is expected to garner about Rs 20 crore.

The other critical issue relating to ITC Classic - the absorption of its employees into ICICI or related companies - was also discussed yesterday at the board meeting, sources said. According to sources, as many as 90 of the 125 Classic employees are being absorbed into associated companies of the ICICI group. While 12 may decide to look out for options on their own, the remaining have asked ICICI to train them in specific jobs.

The board also discussed the company's performance in the third quarter and the trends for the year. Though no details are forthcoming, it is understood that the fourth quarter operating results are expected to be even better than the third quarter but the whole year's results would have to account for provisions for the various problem areas faced by ITC. A Rs 55 crore restructuring charge for the Classic merger apart, there is a substantial interest cost element for the funds deposited for the merger. ITC sources revealed whatever funds are required will be met only through internal generation and ruled out a capital issue.

ITC had clocked a whopping 70 per cent net profit growth in the third quarter, and a 68 per cent growth for the first half of 1997-98.

No clear decision has emerged on how much ITC would bear on account of the ITC Global affair. Sources said the issue may be taken into the coming fiscal.