BAT Denies Report On Quitting ITC

London, Aug 30: | Updated: Aug 31 2002, 05:30am hrs
British American Tobacco Plc has denied speculation in a section of the India media that it is planning to raise its stake in associate ITC Ltd, saying it is comfortable with its holding in Indias largest cigarette maker.

BAT, the worlds second-largest cigarette firm, said in a statement here on Friday it has not approached Unit Trust of India to buy out its stake in ITC. We confirm that we have not approached UTI, either directly or through intermediaries or third parties, with a view to purchasing their shares in ITC, said BAT, which holds a 31.7 per cent in ITC.

Any third party purporting to represent BAT is unauthorised to do so. We also confirm that we have not received any approach from UTI, BAT said, adding it has been asked by ITC to clarify the matter.

ITC shares, a Sensex heavyweight, rose 3.7 per cent on Thursday on the BSE after a domestic daily has reported that BAT is tying up with a local business house to buy UTIs holding in ITC. There has been speculation that the cash-strapped UTI has been looking to sell large stakes it owns in companies to strategic buyers.

UTI and other domestic FIs own a 36.6 per cent stake in ITC, which accounts for nearly 7 per cent of the Sensex.

The ITC shares closed little changed at Rs 699.50 on Friday, ahead of BATs statement. BAT, whose shares were up 1.97 per cent at 749-1/2 pence at noon, said in the statement it supported the strategy and current management at ITC, which also has interests in hotels, agriculture and paper.

The Indian business is a small part of BATs global operations. The tobacco giant also said it is aware of New Delhis curbs on foreign ownership in local tobacco companies, but did not give details.

Foreign companies can directly own a maximum of 49 per cent in domestic tobacco firms. (Reuters)