Lemon Tree Hotels Ltd has received no-objection letters from the National Stock Exchange and Bombay Stock Exchange for its proposed Composite Scheme of Arrangement, paving the way for the company to submit the draft scheme to the National Company Law Tribunal.
The regulatory clearance is an important step in the restructuring announced by the company in January.
The proposed scheme seeks to consolidate subsidiaries, separate select hotel assets and development capabilities, and create a separately listed hospitality asset platform through Fleur Hotels Ltd.
Six subsidiaries to be consolidated
Under the scheme, two wholly owned subsidiaries, Carnation Hotels Pvt Ltd and Hamstede Living Pvt Ltd, will be merged directly with Lemon Tree Hotels.
Four other wholly owned subsidiaries — Oriole Dr. Fresh Hotels Pvt Ltd, Canary Hotels Pvt Ltd, Sukhsagar Complexes Pvt Ltd and Manakin Resorts Pvt Ltd — will be merged with Fleur Hotels against the issuance of shares by Fleur to Lemon Tree Hotels.
Hotel assets to move to Fleur
The scheme also provides for the demerger of 12 hotels from Lemon Tree Hotels, comprising 11 operational properties and one under-construction hotel in Shimla, along with the related development capabilities.
The demerged undertaking will also include Lemon Tree’s investment in an under-construction hotel in Shillong through its wholly owned subsidiary. These assets and capabilities will form part of Fleur’s hospitality asset platform.
Ownership details
Upon the scheme becoming effective, shareholders of Lemon Tree Hotels as on the record date will collectively own 32.96% of Fleur.
Lemon Tree Hotels will directly hold 41.03%, while Warburg Pincus will hold the remaining 26.01%, excluding any dilution arising from a primary investment by Warburg Pincus in Fleur.
Exchange clearance valid for six months
The observation letters are valid for six months from September 22, 2026. The company will have to submit the scheme to the NCLT within this period.
The exchanges have also specified conditions, including that financial information contained in the draft scheme should not be more than six months old.
Ongoing adjudication or recovery proceedings involving the companies covered by the scheme will also have to be disclosed to shareholders.
Fleur to be separately listed
Following receipt of all required approvals and the scheme becoming effective, Fleur Hotels is expected to be listed as a separate entity on the Indian stock exchanges.
Lemon Tree Hotels had earlier indicated that the entire process leading to the listing of Fleur was expected to be completed within 12 to 15 months from April 2026.
The restructuring is intended to create a separate platform for the hospitality assets and development capabilities while enabling Lemon Tree Hotels to continue with its operating and asset-light business strategy.