Travelodge to offload two Hampshire hotels in rescue deal
3:37pm Friday 17th August 2012
TWO Hampshire Travelodges are set to be offloaded by the budget hotel operator as it seeks to tackle a £700m debt mountain.
As previously reported Travelodge, which has 18 sites in Hampshire, wants to walk away from 49 of its 505 hotels and write off £700 million of its debts under a controversial rescue deal.
The company said the deals will secure its long-term future and free it of much of its crippling debt burden.
It wants the landlords of the 49 hotels, including its two sites at the Sutton Scotney services near Winchester , to cut rents by 45 per cent over the next six months while it seeks new operators and is asking for a 25 per cent rent cut for a further 109 sites it wants to keep.
Travelodge said there were no current plans to close hotels or make job losses.
As part of a wider financial restructuring, it has agreed that £235 million of bank debt will be written off and £71 million will be repaid, bringing its debt down to £329 million, while a further £476 million of loan notes will also be scrapped.
The rescue plan effectively sees Travelodge seized by its three main lenders - Goldman Sachs and two American hedge funds Avenue Capital and GoldenTree Asset Management - which have taken over ownership from Dubai International Capital, which bought the chain in 2006 in a debt-fuelled deal.
Travelodge has traded well since the financial crisis, but the deal will put its future on a stable footing by strengthening its balance sheet and reducing the interest rate on its debt.