On the ITC hotels demerger..
ITC will retain 40% of the shares in the new hotel business, and holders of ITC parent stock will receive 1 new hotel share for every 10 shares they hold in ITC..
So BATS will still own 25% of 40% (10%) indirectly plus the value of our 1:10 newly issued shares which they could keep or sell on if they are non core to interests..?
The hotels business has a steep growth pipeline already in place building the rooms volume out 3 fold, so it could be a strong asset to keep and yield the dividend income from it..? |
I can't seem to paste an article dated 26/12/24 from ndtvprofit.com which says a little bit more of the expected demerger on Jan 6th |
58.88p in the bag, ex div probably come off a bit more. |
Yeah if we go through another wave like we saw recently then so be it.
I suspect a higher low and then a new higher high will play out which is just fine with me. Being out makes no sense as the yield is so juicy and you never know when it may spike up.
Good luck all 👍🏻 |
No luck with breaking 3000 pence before XD tomorrow, but see how the share price rebuilds going forward, 25% of the ITC hotels business is a very nice chunk of the de-merger cash/shares to consider for use in 2025 and most likely de-leveraging with buybacks for 26/27.. |
In which case Canada is more like 5-6% of BATs business, surprised it is that high. The loss of profit and cash flow will make quite a dent coupled with lower contribution from trimming the India investment. Taking the shine off BAT outlook which was already dulled by a disappointing debt report blamed on adverse exchange rate movements. Does that reduce the scope for buybacks? Thaddeus needs some good news.
Major investors continuing to build powerful stakes in BAT and IMB signalling a future merger which would presumably be constructed on a no cash basis so no bonanza for private investors just a stronger investment proposition. Would save us having to wrestle with which one to back, IMB appears to have the edge for now. |
ITC Ltd on Tuesday said that the company has fixed January 1, 2025, as the effective date for demerger of its hotel business after receiving an approval order from the National Company Law Tribunal (NCLT). ITC share price gained over a percent to ₹475.00 apiece on the BSE after the announcement. |
In line with IFRS 10 (Consolidated Financial Statements), ITCAN is consolidated in the Group's results. For ease of reference and to assist the users of this interim announcement, in the six months ended June 2024, ITCAN's contribution to the financial performance of the Group was:
- Revenue: £409 million;
- Profit from operations: £228 million;
- Adjusted profit from operations: £230 million;
- Net interest income: £66 million and
- Adjusted EBITDA: £235 million.
At 30 June 2024, restricted cash in ITCAN was £1,972 million and restricted investments held at fair value are £445 million, with goodwill recognised on the balance of the Group at £2,320 million. |
I studied the decision when the industry indicated it was acceptable and I agree with gb conclusion. The liability is ringfenced to the Canadian subsidiaries, which will pay a lump sum with local cash where something like CAD$1B was ordered to be lodged by the courts back in 2019, followed by quite a high annual levy on future profits. The consequence to BAT is therefore the impairment of its Canadian subsidiary asset and the reduction in future contributions to group profit. I can't find it now but at the time I remember seeing an estimate that Canada represents 1-2% of BAT business. |
Note nelly the rest of the sentence:
"and the cash generated from the future sale of tobacco products in Canada while at the same time maximizing recovery for the creditors."
NB Solely the responsibility of the Canadian arm. |
No i don't think so. Read between the lines....
"The plan resolves all Canadian tobacco litigation and provides a full and comprehensive release to Imperial, BAT and all related entities for all tobacco claims. This settlement will be funded by the cash on hand and the cash generated from the future sale of tobacco products in Canada while at the same time maximizing recovery for the creditors. It also allows the Canadian tobacco companies to continue operating as a going concern for the benefit of all stakeholders.
The settlement will be funded with cash on hand...
As for the liability split it looks like bats will have to stump up the largest amount at around C$ 17 billion or around £9.4 billion. |
#nellynell, if you read the text for the initial ruling, the penalty is ring fenced and to be paid for from future earnings from ITCAN, the parent BATS is not liable, but this offer has yet to be agreed AFAIR, along with the liability split % with the other majors involved..
After an appeal, a Quebec court in 2019 upheld the 2015 decision that awarded smokers in the Canadian province around CD15BN, forcing the Canadian subsidiaries of all the three cigarette makers to seek bankruptcy protection.
The subsidiaries have been under a court-supervised mediation process negotiating a possible settlement since then.
The allocation of the aggregate settlement amount between the tobacco giants remains unresolved
We will have to wait for the final agreement to be certain.. |
You can kiss a special dividend goodbye whilst they have the Canadian judgement to pay for lol |
#nellynell, when the ITC hotels demerger goes through, the proceeds coming back in here will make a good dent in the debt and there is plenty of room for a special too.. :o)
25.07.2024 - We completed the monetisation of a portion of our ITC stake lowering our holding from 29.02% (31.12.2023) to 25.49% at (30.06.2024), partial monetisation of ITC stake enabled the initiation of a sustainable share buy-back programme, with GBP700M in 2024 and 900M coming in 2025.. |
It would make sense to use the proceeds of the upcoming itc hotels demerger to pay down debt. 2025 already has a buyback in place and the Dividend is already very generous. |
I know its the "standard" way of companies explaining debt in terms of EBITDA leverage but for me adjusted EBITDA and adjusted net debt expressed as a metric is often a way of avoiding saying debt has gone up.
Not saying it is in this case as I have not looked.
So if I had to present an explanation of debt in the accounts and it had risen - but I could say the ratio of debt to EBITDA had fallen ... oh guess what I would say its gone down...
Its just like the Chancellor announcing in the budget speech that debt is falling - we know its rising year over year as these days there is never a public sector debt repayment - but they of course caveat the debt is set to fall as a % of GDP or some such.
The problem with the metric is that the cost of servicing that debt is not included in the EBITDA and this can rise much faster than the debt but that is ignored by the metric.... |
Trading statement - 11/12/2024
We expect to be at the high end of our leverage2 target range of 2.0-2.5x adjusted net debt / adjusted EBITDA2 by year-end 2024, also impacted by recent USD strengthening |
FY-2023 net debt -USD34BN with leverage down to 2.6X
H1-2024 net debt -USD33BN, we continue to make good progress on de-leveraging our balance sheet and expect to be within our narrowed leverage target range of 2.0-2.5X adjusted net debt/adjusted EBITDA range by the end of 2024 driven by continued strong cash generation. |
Is net debt falling? |
3000 pence seems to be a stubborn level to cross, we have been on it, above it or bouncing off it since September, see if we can get over for XD this time round, we know the upstream dividends and further buybacks are robust, the share capital is reducing slowly leaving the outstanding shares in issue to be valued at a higher level..
4 equal tax free dividends at both IMB/BATS from 2025 will add up very nicely.. :o) |
Yeah it's Thursday and can we go into it having reached 3060??
Good luck all 👍🏻 |
It's always on Thu |
I thought it was 19th??? |
[edit] next dividend in the pot 18th, XD 19th for another 58.88 pence.. :o) |
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