British American Tobacco plans to offload stake in India’s ITC Hotels

British American Tobacco plans to offload its stake worth about $776 million in India’s ITC Hotels, the company said on Thursday, as it looks to reduce debt and exit a non-strategic asset.

The maker of Lucky Strike and Dunhill cigarettes said it intends to sell between 7% and its entire 15.3% stake in ITC Hotels through an accelerated bookbuild process.

BAT is the second-biggest shareholder in ITC Hotels, according to LSEG data. It inherited the stake through its shareholding in ITC Ltd, which spun off its hotels business in January.

“A direct stake in ITC Hotels is not a strategic holding for BAT,” CEO Tadeu Marroco said in a statement.

BAT’s shares rose 1.5% after the announcement, while India-listed ITC Hotels ended the session roughly flat.

British American Tobacco sells $1.5 billion stake in India’s ITC via block deal

The final number of shares sold will be determined to optimise the overall pricing outcome to the group, BAT said in a statement.

Its roughly 15% holding is currently valued at about $776 million, according to a Reuters calculation.

In a bid to cut its leverage, BAT has also been steadily reducing its stake in ITC Ltd. In May, it sold $1.5 billion worth of shares in ITC and $2 billion last year, in two of the biggest block deals in the Asian country.

ITC Hotels competes with EIH, parent of Oberoi, and Indian Hotels  which owns the Taj brand. Its portfolio spans luxury to mid-scale segments across six brands.