Lemon Tree Hotels Limited has informed the Exchange about Scheme of Arrangement
LEMONTREE · price
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Lemon Tree Hotels' board has approved a Composite Scheme of Arrangement to restructure the group by splitting its asset-heavy hotel-ownership business from its asset-light management business. Two wholly-owned subsidiaries (Carnation Hotels and Hamstede Living) will merge into Lemon Tree Hotels, while four other wholly-owned subsidiaries (Oriole Dr. Fresh, Canary Hotels, Sukhsagar Complexes, Manakin Resorts) will merge into Fleur Hotels Limited (FHL), the material subsidiary in which Lemon Tree currently holds 58.91%. Separately, the hotel-asset platform of Lemon Tree (11 operating hotels, 1 under-construction hotel, plus an investment in Arum Hotels) will be demerged into FHL in a ratio of 20 FHL shares for every 311 Lemon Tree shares. The demerged division contributed Rs. 23,037.34 Lakhs in FY25 turnover, about 59.90% of Lemon Tree's standalone turnover. Netherlands-based investor Coastal Cedar Investments B.V. will acquire APG's 41.09% stake in FHL and has the right to invest up to Rs. 960 crore more for growth. Post-scheme, FHL will be separately listed on the stock exchanges and will no longer be a subsidiary of Lemon Tree, which will continue as the management and brand platform holding roughly 41.03% in FHL.
Lemon Tree shareholders will directly receive FHL shares in addition to their existing LTHL holdings, giving them separate listed exposure to the hotel-ownership business. Lemon Tree transforms into a pure asset-light management and brand company, while FHL becomes the asset-heavy listed vehicle with a new deep-pocketed investor supporting expansion. The share price could see re-rating as the two businesses get separate market valuations, though the scheme still needs NCLT, SEBI, shareholder and CCI approvals before becoming effective.