Lemon Tree to tap capital markets

Lemon Tree to tap capital markets

Hyderabad: Hospitality player Lemon Tree Hotels (LTH), in which global private equity giant Warburg Pincus holds 25% stake, plans to tap the capital markets in the first quarter of 2013 to raise funds for its next round of expansion.

LTH, which currently runs a chain of 14 upscale hotels straddling 1,500 rooms across 11 cities and has six more hotels slated for completion by 2012, has invested around Rs. 1600 crore to reach 20 hotels and 2,800 rooms by 2012 end. This includes Rs 800 crore by way of equity and Rs 800 crore debt.

“Once we reach the 3,000 rooms mark and revenues cross Rs 600 crore, we plan to go public by the first quarter of 2013,” Patanjali (Patu) Keswani, chairman and managing director, Lemon Tree Hotels and Red Fox Hotels told newpersons here on Tuesday.

Though Keswani refused to divulge the quantum of money the group was hoping to raise from the markets, he indicated that the group was confident of getting a $1 billion plus valuation.

The Rs 300 crore turnover LTH, which owns all the hotels that it operates, also plans to spin off its hotel assets into a separate real estate entity which would be listed on bourses overseas.

“Within three or five years we will look at putting our rooms together and creating a real estate company and listing it on Singapore or London bourses,” he explained while unveiling the group's largest hotel project in the country here. LTH kicked off its 267-room Lemon Tree project in Hyderabad's IT district of HITEC City in Madhapur.

July 05, 2011