Published on : Friday, March 15, 2019
Lemon Tree Hotels has signed an agreement with Mauritius-incorporated Berggruen Hotels and Berggruen Investments that builds and operates hotels under the Keys brand, to acquire a 100 percent stake in Keys Hotels in India.
Lemon Tree shares spiked on news of the deal, but could not hold on to gains for long. Los Angeles-based venture capital firm Berggruen Holding is the owner of Berggruen Hotels which was formed in 2006 to own and operate the Keys Hotels brand. The current term sheet is a non-binding agreement and the actual transaction is expected to be completed only after proper due diligence.
Keys Hotels portfolio includes 21 owned/managed hotels with 1,911 rooms in 19 cities in India. The company also owns two land parcels for hotel development in Goa and Raipur. The company operates three brands, Keys Prima Hotels, Select Hotels, and Lite Hotels to cater to the mid-scale 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 Hotel has seen a spate of senior-level exits in the last 2-3 years.
As per reports, Keys Hotel 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.