BUDGET hotelier Travelodge has completed a restructuring to nearly halve its bank borrowings as it seeks trim its 500-plus estate by nearly 10 per cent.
Under the terms of the Company Voluntary Arrangement (CVA) approved by creditors last month, debts of £235 million have been written off and a further £71m repaid, taking the company’s total borrowings down to £329m. The deadline for repayment of the remainder has been extended to 2017.
The new owners of Travelodge – who took control from Dubai International Capital under a debt-for-equity swap – have also injected £75m of new money. That cash, from Goldman Sachs and US hedge funds Golden Tree Asset and Avenue Capital Group, will fund a £55m refurbishment covering 11,000 rooms across 175 hotels.
The CVA saw landlords of 109 properties agree to a 25 per cent reduction in rent. Travelodge is also to sell 49 hotels, among them the 178-bedroom Travelodge Edinburgh West End.
Chief executive Grant Hearn said the successful completion of the restructuring had secured the company’s long-term future.