Warburg Pincus-funded Lemon Tree Hotels has embarked on a major restructuring of its business with an eye on unlocking value. The company plans to separate ownership and management of hospitality assets. The company had also announced earlier that it is planning to set up a third-party hotel management company and will introduce new hospitality brands.Patu Keswani, Chairman And Managing Director, Lemon Tree Hotels Pvt Ltd (LTHPL), confirmed the move to separate brand management from asset ownership. "It certainly is part of our long-term strategy. We will have a very clear division and I hope to do something specific even before our IPO, which should happen within a couple of years from now. To start with, we are planning to merge Red Fox into Lemon Tree and amalgamate the two. Eventually, we will have a company that will own both Lemon Tree and Red Fox brands, the management will reside there and so will a lot of assets," he said. Lemon Tree is open to distinct identities for projects provided they "come with tax benefits," said Keswani. "What it basically means is we will not downstream or move around any asset that will entail payment of duties, taxes and so on." The company has 4-5 projects — with 100% asset ownerships — in its portfolio. As a long-term strategy, the management is looking at aggregating them to create an asset company. "It is an on-going process, and we are in talks with lots of people to invest with us in the asset company. And as long as we own a majority of that company, we will be open to creating multiple asset companies," he said. On the buzz about a Dutch pension fund coming on board as an investor, Keswani said "We are talking to many people, including investors from Europe. Nothing has been finalised yet."
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