Lemon Tree Hotels Limited announced a composite scheme of arrangement approved by its Board of Directors on January 9, 2026. This scheme involves the amalgamation and demerger of several subsidiaries, including Fleur Hotels Limited, Carnation Hotels Private Limited, Hamstede Living Private Limited, Oriole Dr. Fresh Hotels Private Limited, Canary Hotels Private Limited, Sukhsagar Complexes Private Limited, and Manakin Resorts Private Limited.

Under the scheme, two wholly-owned subsidiaries, Carnation Hotels Private Limited and Hamstede Living Private Limited, will be amalgamated with Lemon Tree Hotels Limited. Separately, three other wholly-owned subsidiaries, Oriole Dr. Fresh Hotels Private Limited, Canary Hotels Private Limited, Sukhsagar Complexes Private Limited, and Manakin Resorts Private Limited, will be amalgamated with Fleur Hotels Limited (FHL), a material subsidiary. Subsequently, the demerged undertaking, comprising specific hotels and the hospitality asset platform of Lemon Tree Hotels, will be vested in FHL.

The Board also approved an Implementation Agreement, a Share Purchase Agreement (SPA), and a Shareholders' Agreement (SHA). The SPA involves the sale of APG Strategic Real Estate Pool N.V.'s 41.09% stake in FHL to Coastal Cedar Investments B.V. (Investor). The SHA, entered into by Lemon Tree Hotels, FHL, the Investor, and promoters, outlines the governance and operational rights for FHL. Under the SHA, the Investor has the right to provide up to ₹960 crore in growth capital to FHL through a preferential issue.

The scheme is conditional upon approvals from SEBI, stock exchanges, shareholders, creditors, and the National Company Law Tribunal (NCLT). The appointed date for the scheme is April 1, 2026. The demerger aims to create two distinct platforms: Lemon Tree Hotels as the asset-light hotel management and brand company, and FHL as the asset-heavy hotel ownership and development platform, with FHL potentially seeking a separate listing.