Travelodge has secured a vital rescue deal after the vast majority of its landlords and creditors backed a move to cut rent payments and sell off hotels.
A total of 97% of Travelodge creditors voted in favour of a plan, the company voluntary arrangement (CVA), that will involve selling 49 hotels to other operators and slashing rents on more than 100 hotels.
The deal will mean that Travelodge, which operates more than 500 hotels across the UK, Ireland and Spain, will be able to ease its debt burden that it inherited from its former private equity owners, with £235 million of bank debt being written off.
Landlords of 109 of Travelodge’s hotels will take a 25% cut in the rent. The remaining 347 branches will be unaffected.
The hotel chain’s three main lenders, Goldman Sachs and two US hedge funds, Avenue Capital and GoldenTree Asset Management, have already taken control of the company from Dubai International Capital, which paid £675 million for Travelodge in 2006.
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