Travelodge executive chairman and former chief executive Grant Hearn is taking full control for the budget hotel chain with the departure of chief executive Guy Parsons.
The company, owned by Dubai International Capital, is in negotiations with two US hedge funds, Avenue Capital and GoldenTree Asset Management, about an injection of cash.
Parsons will step down on April 20, the group said in statement.
Hearn was previously chief executive between 2003 and 2010, during which period Keith Hamill was chairman. Hamill, currently deputy chairman, will resume the role of chairman.
Hearn said: "During recent discussions regarding our financial restructuring, the board has expressed their wish for me to lead the business once again.
"Clearly, as recently has been said, there cannot be two captains running a ship and as a result Guy has decided to leave the company."
Parsons said: "This is a good time for me to step down as chief executive of Travelodge."
Travelodge was bought by Dubai Holding's investment arm Dubai International Capital for £675 million in 2006 and embarked on a spending spree across the UK and Europe.
The financial restructuring of the company was announced in February due to its debts.
The group operates 500 hotels and 35,000 rooms mainly in the UK, but also Spain and Ireland. It plans to open 41 hotels this year and 100,000 rooms by 2025.
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