Written by: Keith Tully
Published: 10th September 2012
Travelodge, the UK’s leading budget hotel group, has announced that the Voluntary Arrangement (CVA) it launched on the 17th August 2012 has been approved.
97% of Travelodge creditors, including 96% of landlords from all three categories, voted in favour of the arrangement, in excess of the 75% required for the CVA to be approved.
"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.”
Under the terms of the proposed CVA:
In 1985, Travelodge opened the UK’s very first budget hotel on the A38, in Barton under Needlewood. Today the company is the country’s fastest growing and most innovative hotel chain with over 500 hotels across the UK, Ireland and Spain.
The company has a target to expand to 1,100 hotels and 100,000 rooms by 2025. This is the equivalent of opening a new hotel every ten working days, and will be achieved via organic growth (building new hotels, converting existing hotels and changing use in existing office buildings).