Lemon Tree Hotels Restructures, Warburg Pincus Invests ₹960 Cr in Subsidiary
Overview
Lemon Tree Hotels has approved a significant business reorganization, with Warburg Pincus committing up to ₹960 crore to its subsidiary, Fleur Hotels. Warburg Pincus will acquire APG's stake, and Fleur will be spun off as a separate, listed hotel ownership entity within 12-15 months. Lemon Tree will transition to an asset-light hotel management platform.
Stocks Mentioned
Lemon Tree Hotels announced a strategic business overhaul and secured substantial investment from Warburg Pincus, confirming prior reports. The company's board approved a Composite Scheme of Arrangement, clearing the path for Warburg Pincus's affiliate, Coastal Cedar Investments BV, to acquire APG's 41.09% stake in Fleur Hotels.
This deal includes Warburg Pincus's commitment to invest up to ₹960 crore of primary capital into Fleur Hotels to fuel future expansion. Currently a subsidiary, Fleur Hotels is slated to become an independent, separately listed entity on Indian stock exchanges within the next 12 to 15 months, subject to regulatory approvals.
Strategic Realignment
The restructuring will pivot Lemon Tree Hotels towards an asset-light hotel management and brand platform. Concurrently, Fleur Hotels will evolve into the group's dedicated hotel ownership and development arm. All existing hotel assets under Lemon Tree will be transferred to Fleur, which will also spearhead new acquisitions and development projects.
Ownership Structure
Following the transaction, Lemon Tree Hotels shareholders will hold a 32.96% stake in Fleur Hotels, with Lemon Tree retaining 41.03%. Warburg Pincus is set to own the remaining 26.01%, prior to any dilution from the primary capital infusion. The scheme also involves merging Lemon Tree's wholly-owned subsidiaries Carnation Hotels and Hamstede Living into the parent company. Further, Oriole Dr Fresh, Sukhsagar Complexes, Manakin Resorts, and Canary Hotels will merge with Fleur.
Expanded Portfolio
Twelve hotels, comprising 11 operational properties and one under construction in Shimla, along with development capabilities and an investment in a Shillong project, will be demerged into Fleur. These properties will operate under a new agreement with Lemon Tree, effective April 1, 2026. Post-restructuring, Fleur's owned portfolio will swell from 24 hotels (3,993 keys) to 41 hotels (5,813 keys). Lemon Tree will continue managing and franchising its third-party owned assets under its established asset-light model.
