Hotel chain Travelodge has written to its landlords warning that the group will be forced to pursue a company voluntary agreement (CVA) if an agreement cannot be reached.
In the letter, seen by The Caterer, the group's proposals include rent cuts of up to 63%, with a return to full rent by the end of 2021, and the offer of lease extensions.
Travelodge, which employs around 10,000 people, estimates that the combination of hotel closures, sites unable to reopen until 4 July at the earliest and a predicted slow recovery will mean more than £350m in lost revenues for the business – the equivalent of 18 months' rent.
The letter said: "The overall position that confronts us now poses even greater challenges for the months ahead than any of us could have expected… While we appreciate this is a substantial temporary reduction for some landlords, we believe that it is the best outcome possible in view of the current situation."
The letter goes on to say: "Should we be unable to secure adequate support, we will have to move quickly to ensure the stability of the business and the interests of its stakeholders. The likely next step in that circumstance would be the pursuit of a company voluntary arrangement… We believe it is in all our interests to try to reach a consensual agreement."
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