With the arrival of new owners to the budget-hotel chain,
taking over from Dubai International Capital with a debt-for-equity swap, the
company have announced a restructuring to potentially halve their bank borrowing.
Creditors agreed to the terms in a Company Voluntary
Arrangement that cut the company’s total debt from £635 million to £329m. This
is with £235m written off completely and £71m repaid by the new owners. The
repayment date has been extended to 2017, with an interest rate of 0.25% above
LIBOR until the end of 2014.
As part of the agreement, the chain has agreed to reduce its
current estate by 10%. The company currently owns more than 500 locations and
will see 49 hotels being sold from the chain, including the Travelodge
Edinburgh West End, with 178 bedrooms. Landlords of 109 of the properties
approved a 25% reduction in rent.
Grant Hearn, CEO of Travelodge, said; “[Following the
successful completion of the CVA process], the financial restructuring completed
today will provide further stability to the business. It demonstrates our
investors’ confidence in the company and I believe we have now secured the
long-term future of the business.”
More than 13 million people stayed at a Travelodge hotel in
2011, with 90% booking online. Travelodge was the first budget hotel chain to
launch in the UK in 1985. It has since expanded to become a leading global hotel
chain.
1 comment:
Sounds Good to me.
I have previously been to Travelodge and disliked the service. Hopefully with the new refurbishments it won't raise the prices too much.
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