Lemon Tree Hotels Limited has informed the Exchange about Agreements
LEMONTREE · price
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Awaiting price reaction for this filing.
On January 9, 2026, the Board of Lemon Tree Hotels Limited (LTHL) approved a Composite Scheme of Arrangement involving LTHL, its material subsidiary Fleur Hotels Limited (FHL), and six wholly-owned subsidiaries. Two subsidiaries (Carnation Hotels and Hamstede Living) will be amalgamated into LTHL, while four others (Oriole Dr. Fresh, Canary Hotels, Sukhsagar Complexes, and Manakin Resorts) will merge into FHL. Additionally, the asset-heavy hospitality business — comprising 11 operating hotels, 1 under-construction hotel, and the development platform, representing 59.90% of LTHL's turnover (Rs. 23,037.34 lakhs as of FY25) — will be demerged into FHL. As consideration, FHL will issue 20 shares for every 311 LTHL shares held. FHL will seek a separate stock exchange listing, with LTHL retaining approximately 41.03% stake. Separately, Netherlands-based Coastal Cedar Investments B.V. will acquire APG's 41.09% stake in FHL and has the right to invest up to INR 960 crores via a preferential issue. The scheme is targeted to be effective from April 1, 2026, subject to NCLT, SEBI, Competition Commission, and shareholder/creditor approvals.
Shareholders of LTHL will become direct shareholders of two listed entities — an asset-light management/brand company (LTHL) and an asset-heavy hotel-ownership platform (FHL) — enabling distinct market valuations for each. The entry of Coastal Cedar as a strategic investor with a potential INR 960 crore capital infusion supports FHL's growth plans. Share price may react positively on clarity of unlocking value, but execution remains subject to multiple regulatory approvals and the demerger ratio of 20:311 is the key benchmark to track.