Dutch company APG to acquire stake in Lemon Tree Hotels, forms JV
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Lemon Tree Hotels on Wednesday said Dutch pension fund manager APG will acquire a strategic stake in the hospitality chain and two entities will also set up a Rs 2,000 crore joint venture company for building new hotels in the country.
As part of the deal, APG 'combined investment in the joint venture and the stake in Lemon Tree Hotels is worth Rs 650 crore, the Indian Hospitality chain said in a statement.
However, the break-up of the deal was not announced.
Besides, Lemon Tree Hotels and APG would set up a joint venture (JV) company Fleur Hotels. The new entity would invest Rs 2,000 crore by the end of 2016 to develop 4,500 rooms in the country making Lemon Tree Hotels one of the largest hotel owners in India with a total of 8,000 rooms, it said.
All hotels will be branded as Lemon Tree Hotels, Lemon Tree Premier or Red Fox Hotels, the company said.
"...We are delighted to partner with APG in this endeavour to significantly increase the supply of mid-market rooms in India, which has huge unmet demand for this category of hotels," Lemon Tree Hotels Chairman and Managing Director Patu Keswani said.
"On completion of these proposed hotels by 2016-17, Lemon Trees will co-own and operate over 8,000 rooms, making it one of the largest hotel owners in India and the dominant player in the mid-market hotel segment," he added.
Lemon Tree Hotels, started by Patu Keswani, currently owns and manages 18 hotels under Lemon Tree Premier, Lemon Tree and Red Fox brands with an inventory of 2,000 rooms while APG manages pension assets totalling about 299 billion euros on behalf of Dutch pension funds.
Keswani and US-based private equity firm Warburg Pincus are the two largest shareholders of Lemon Tree Hotels.
APG Head of Non-listed Real Estate Daan Van Aert said," We view China and India as the major growth engines of the global economy and will expand our foot print further in these markets. India's consumption led economy provides incremental diversification benefits to our portfolio."