Lemon Tree Hotels Buys Indian Peer Berggruen Hotels

Main Photo: A deluxe room at Keys Ronil Resort, Goa

Date: March 2019

Location: 19 cities in India, with two development sites in Goa and Raipur

Name: Currently Key Hotels

No. of Keys: 21 hotels – 1,911 Keys

Seller: Mauritius-incorporated, Los Angeles based venture capital firm, Berggruen Hotels and Berggruen Investments, that builds and operates hotels under the Keys brand, is to sell a 100 percent stake in Keys Hotels in India.  Keys is headed up by Anshu Sarin, Chief Executive Officer.

The Keys hotels portfolio comprises seven owned hotels with 936 guest rooms in six cities. The company also has a land parcel in Goa and Raipur for future developments. In addition to its owned assets, it also has 975 guest rooms by way of management/ franchise agreement i.e. asset-light model.

Buyer: Lemon Tree, whose shares spiked on news of the deal, but could not hold on to gains for long, headed up by Patu Keswani.

The current term sheet is a non-binding agreement and the actual transaction is expected to be completed only after proper due diligence.

The company operates three brands, Keys Prima Hotels, Select Hotels, and Lite Hotels to cater to the midscale and economy hotel segments.

Keys Hotels had been looking for buyers and there were reports in February this year about OYO’s interest to acquire the company.

Keys has seen a spate of senior-level exits in the last 2-3 years.

As per reports, Keys has around Rs 160 crore estimated debt on its balance sheet currently while Lemon Tree had a debt of around Rs 1,050 crore as on September 30, 2018.

With the finalisation of the acquisition, Lemon Tree will expand its operating portfolio to 75 Hotels with 7,322 rooms in 44 cities in India

Price: Undisclosed

THPT Comment: Lemon Tree really motoring following it’s IPO in 2018.

First Seen: Money Control

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