7 Days Group Holdings Ltd, China's second-largest economy hotel chain, announced Wednesday the closing of its privatization deal as it was delisted from the New York Stock Exchange and purchased by a new hotel group, Plateno.

Plateno Hotels Group, funded by 7 Days Inn's major shareholders and two investment funds, Carlyle Group and Sequoia Capital China, will take over existing businesses and develop higher-level hotel operations.

7 Days Inn was founded in Guangzhou in 2005 and expanded rapidly. The economy hotel brand gained capital support from many investment companies and was listed on the New York Stock Exchange in 2009. The group has 1,600 hotels in operation nationwide by the end of March, 2013.

The newly founded Plateno Hotels Group purchased 7 Days Group for $688 million. Besides 7 Days, Plateno announced it will launch three new hotel brands targeting the middle and high-end market.

The three new brands include high-end brand Portofino Hotel, middle-end brand Lavande Hotel and coffee culture themed-hotel brand JamesJoyce Coffete. The group also said that another hotel brand targeting trendsetters called Zmax Hotel will be launched later.

According to Co-chairman of Plateno Hotels Group Zheng Nanyan, He Boquan, Co-chairman of 7 Days Group, holds about 30 percent of shares in Plateno Hotels Group and Carlyle Group holds about 20 percent, and Sequoia Capital about 15 percent. Zheng has about 10 percent of shares in the new group.

 Zheng said that if Plateno Hotels Group is listed in the future, it will choose Hong Kong, Chinese media reported. In recent years, customers have more requirements for hotels in addition to accommodation, according to Zheng.

Economy hotels face the challenge of development and have begun to seek opportunities in the middle and high-end hotel market. Some Chinese economy hotel chains like Home Inn and Jinjiang Inn have taken the strategy of multiple brands to explore the middle and high-end market. Plateno Hotels Group will open 300 middle and high-end hotels in five to ten years.

As a wholly-owned subsidiary of Plateno Hotels Group, 7 Days Group will still run the economy hotels. Zheng said that 7 Days Inn's expansion will be faster and it will have 2,000 chain hotels by 2014, and 7 Days will be the main source of income for Plateno Hotels Group.