Warburg Pincus is acquiring a stake in India’s Fleur Hotels from Dutch pension asset manager APG, and has committed up to INR960 crore (€91m) to support the hotel chain’s future growth.
APG Strategic Real Estate Pool, an investment vehicle for the Dutch pension manager, has agreed to sell its entire 41.9% stake in the Lemon Tree Hotels subsidiary, Fleur Hotels.
The transaction is part of a strategic reorganisation of Lemon Tree Group, which will lead to the creation of two focused, and large-scale platforms - Lemon Tree Hotels, as a pure-play, asset-light hotel management and brand platform and Fleur Hotels as a hotel ownership platform.
Post-restructuring, Fleur will operate 41 hotels in India.
The reorganisation is also expected to result in a listing of Fleur’s shares on the National Stock Exchange and the Bombay Stock Exchange.
Warburg Pincus first invested in Lemon Tree in 2006.
Anish Saraf, managing director, Warburg Pincus, said: “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.”
Patanjali Govind Keswani, founder and executive chairman of Lemon Tree and Fleur Hotels, 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.
“We are also pleased to renew our partnership with Warburg Pincus, with whom we share a long history of building the foundations of Lemon Tree. This collaboration marks a defining moment as we enter the next phase of expansion for Fleur.”
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.”
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