A company voluntary arrangement (CVA) that will see Travelodge shed 49 hotels and reduce rent on 109 more has been approved by the budget hotel chain's creditors.
Over 75% of creditors voted in favour of the deal yesterday, and over 50% of unconnected creditors approved it.
"This 'yes' vote enables Travelodge to tackle the underlying problem of its unsustainable lease burden, which was weighing down the business," said Richard Fleming, UK head of restructuring at KPMG and supervisor of the CVA. "The approval of the CVA also means that £709m of debt will be written off and new equity of £75m provided by the lenders. This will finance a £55m refurbishment programme across 175 of the business's hotels, a move which will benefit customers and landlords alike."
Brian Green, restructuring partner at KPMG, said landlords recognised that the CVA would deliver them a better return.
"Following our work on the Fitness First CVA we have listened to the views of landlords and incorporated their feedback into this proposal," Green said.
Travelodge now has the structure and finance it needs to move forward, thanks to the ongoing support of its creditors."
By Matilde Casaglia
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