News

Travelodge proposes new deal to end landlord row

Travelodge proposes new deal to end landlord row
Business
Budget hotel business Travelodge is to propose a new restructuring plan that it hopes will end a row with landlords and protect thousands of jobs.

The company wants landlords to agree £144m of temporary rent cuts on its 564 sites in return for fresh investment.

Travelodge, whose backers include Goldman Sachs, has refused to pay rent in the three months to end-March.

But landlords accuse the hotel chain of taking advantage of the virus pandemic to cut its debts at their expense.

Travelodge is due to file for a limited form of bankruptcy - a company voluntary arrangement - on Wednesday that would allow it to force through rent cuts if necessary.

However, the company is not planning hotel closures, and has said it will start paying full rent again from the end of next year.

Like most hotels, Travelodge has suffered amid the coronavirus lockdown as holidays, events and business trips are cancelled.

The company has come under fire from landlords, according to Sky News , which first reported the Company Voluntary Arrangement (CVA) deal.

Travelodge is arguing that it will lose £350m in sales due to the lockdown and that 10,000 jobs are at stake.

The company s owners will use Travelodge s £100m of reserves, £100m in new borrowings and £40m in fresh cash to prop up the firm.

The proposal will also include a share of profits above £200m, once business recovers.

But landlords will only receive a fraction of the rent they are owed until the end of next year. Some landlords have previously threatened to seize the hotels and run them themselves, the Daily Telegraph has reported.
Read more on bbc.com
News Topics :
RELATED STORIES :
Business
It is understood the owner of Lakeside shopping centre does not feel Sir Philip s offer to seek less severe cuts in rent from landlords goes far enough. If the...
Business
Debenhams is closing another three stores as the retailer grapples with falling High Street sales made worse by the coronavirus lockdown. Stores at Milton Keynes, Watford and the Metrocentre, Gateshead,...
Business
Sir Philip Green s Arcadia retail group is facing a crucial week, with creditors set to vote on his proposed restructuring plans on Wednesday. If landlords and the Pensions Regulator...
Technology
Large hotel chains are feeling the heat from Airbnb and other startups building digital marketplaces for travelers with a more flexible range of places to stay, and more flexible prices...
Business
The department store chain fell into the hands of its lenders last April, a group of banks and hedge funds led by US firm Silver Point Capital, after struggling for...