Creditors approve Travelodge CVA proposals
The creditors of Travelodge have approved its proposed Company Voluntary Arrangement (CVA).
The decision comes after months of fierce negotiation between the budget hotel chain and its landlords, which saw threats of legal action and evictions in a bid to secure rental payments.
Just two days ago a group of landlords of more than 400 of the group's 580 hotels said they would not back the proposals as there was still too much uncertainty.
There remains a 28-day challenge period, during which the outcome may be challenged through the courts by any creditor of Travelodge, however Martin Moore, chairman of Secure Income REIT which owns 123 Travelodge hotels, said he was "pleased" the process was complete, adding this would provide Travelodge with "the breathing space it requires to re-establish its business".
Travelodge revealed the details of its CVA proposal earlier this month, seeking a 38% total rent reduction. The group proposed to pay landlords a total of £230m, approximately 62% of rent due, between April 2020 and the end of 2021, with no proposed hotel closures.
Its CVA package will see shareholders put forward a £240m support package comprising the use of more than £100m in reserves, taking on £100m in extra debt and putting in up to £40m in new equity.
Travelodge reveals details of CVA proposal seeking 38% total rent reduction >>
Travelodge landlords say still too much uncertainty, despite ‘sweetened' offer >>