"We will be setting up nine new hotels in the major towns of India in the next two years and would invest Rs 500 crore in the expansion," Patu Keswani, chairman and MD Lemon Tree Hotels told PTI.
He said the expansion would be funded partly through equity investment from private partners.
"Already Warburg Pincus has acquired a 26.5 per cent stake in Lemon Tree for Rs 210 crore (Rs 2.10 billion). We have also offloaded a similar stake to them in our planned economy hotel Red Fox Hotels for Rs 70 crore (Rs 700 million)," Keswani said.
The company currently owns and manages two hotels in Gurgaon and plans to open a hotel chain under the brand name Red Fox Hotels.
Lemon Tree would launch two out of the proposed nine hotels by late this year at Pune and Goa. The rest of the seven hotels would be operational by the end of 2008, he added.
"The company has acquired land in ten major cities in India including Delhi and the construction work on these seven hotels has already started," he said.
Lemon Tree, which had reported a profit of Rs 14.5 crore (Rs 145 million) in the previous fiscal, is targeting to more than double the numbers by 2007-08 and plans to achieve Rs 32 crore (Rs 320 million) in the next fiscal.
"We have set a target of Rs 32 crore for the next fiscal and are quite positive of achieving it with three more hotels at Hyderabad, Chennai and Ahmedabad operational by late next year," Keswani said.
