Lemon Tree Hotels on Saturday announced a reorganisation , leading to bifurcation of its businesses under two different entities.
After the reorganisation, Lemon Tree Hotels will be a pure-play, asset-light hotel management and brand platform and Fleur Hotels, a subsidiary of the company, will own and develop the hotels
US based PE firm Warburg Pincus will acquire Dutch pension fund manager APG’s entire 41.09% stake in Fleur and invest up to ₹960 crore of primary capital to support the growth of Fleur, Lemon Tree said.
Strategic Shift to Asset-Light Model and Fleur Listing
This investment marks a renewed partnership between Warburg Pincus and Lemon Tree, following Warburg Pincus’ earlier investment in the company in 2006, which supported Lemon Tree’s initial growth to become a prominent hotel brand and platform, Lemon Tree said in
The scheme, to be implemented through a NCLT-approved process, will reorganise the group’s asset ownership and operating structure. The hotel assets currently owned by Lemon Tree will be transferred to Fleur, which will serve as the group’s exclusive asset ownership and development company, the company said.
Fleur will lead the group’s all future hotel acquisitions and development, while Lemon Tree will transition to a fully asset-light model, focused on growing its hotel management, franchising and digital business. The Scheme will also result in a listing of Fleur’s shares on NSE and BSE.
Leadership Transition and New Growth Phase
Patanjali Govind Keswani, founder of Lemon Tree Hotels, will serve as the executive Chairman of Fleur Hotels and will eventually transition to a non-executive role at Lemon Tree, the company said . Keswani, said, “This scheme is intended to create a simplified, transparent, and growth-oriented structure for both companies, which we believe will enhance long-term value for our shareholders, “
He said the collaboration with Warburg mark a defining moment as they enter the next phase of expansion for Fleur. “With the Indian hospitality industry at an important inflection point, we look forward to leveraging Warburg Pincus’ global network and deep real estate and hospitality experience to scale responsibly, advance digital-led capabilities and embed sustainability as a core pillar of Lemon Tree’s and Fleur’s long-term growth journey.” Keswani said
Anish Saraf, managing director, Warburg Pincus, said, “We are pleased to once again partner with Patu (Patanjali Keswani) and the Fleur leadership team to support the next chapter of growth for the platform. Lemon Tree has played a pioneering role in shaping India’s mid-market hospitality segment, building a large scale, high-quality portfolio with strong brands and operating capabilities. .”
Dominic Doran, Senior Director, Real Estate, Asia-Pacific, APG Asset Management, said, “This transaction in Fleur is the culmination of APG’s long-term approach to investing and provides our clients with a full-cycle return from one of the fastest growing economies in the world.”