Lemon Tree Hotels has executed a Joint Venture Agreement (JVA) for the development of the Aurika Shillong project. The JVA is between Carnation Hotels Private Limited (a wholly owned subsidiary) and RJ Corp. This agreement will see RJ Corp acquire a 49% stake in Arum Hotels Private Limited, the Special Purpose Vehicle for the project, thereby changing Arum’s status from a step-down wholly owned subsidiary to a step-down subsidiary of Lemon Tree Hotels.
New Joint Venture for Aurika Shillong
Lemon Tree Hotels Limited announced the execution of a Joint Venture Agreement (JVA) for the development of its Aurika Shillong project. This strategic move involves its wholly owned subsidiary, Carnation Hotels Private Limited, and RJ Corp. The JVA is specifically structured around Arum Hotels Private Limited, a Special Purpose Vehicle and a step-down wholly owned subsidiary of Lemon Tree Hotels.
Shareholding and Subsidiary Status Change
As per the terms of the JVA, RJ Corp will acquire a 49% stake in Arum Hotels Private Limited by subscribing to a fresh issuance of equity shares. Consequently, Carnation Hotels Private Limited will hold the remaining 51% of the equity share capital in Arum. Upon completion of these transactions, Arum Hotels Private Limited will no longer be a step-down wholly owned subsidiary of Lemon Tree Hotels but will continue to be a step-down subsidiary.
Transaction Details
The agreement involves the issuance of 47,65,394 Equity Shares of face value of Rs. 10/- each by Arum to RJ Corp. The Board of Directors for Arum will be comprised of an equal number of directors nominated by both Carnation and RJ Corp, ensuring balanced governance. The JVA also includes provisions that restrict the transfer of shares to third parties outside of affiliate groups, subject to the JVA’s terms.
During the last financial year, Arum Hotels Private Limited contributed NIL turnover and a net worth of Rs. (12.97) Lakhs to the consolidated financial statement of Lemon Tree Hotels.
Source: BSE
