Travelodge (the Company), the UK’s leading budget hotel company, announced on 4 September that the Company 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.
The approval of the CVA allows Travelodge to secure the financial restructuring necessary for the business. This will include writing off £700+ of its debt, offloading up to 10% of its hotels, and agreeing lower rents at over 100 sites.
KPMG, which arranged the CVA, said creditors will receive a return of 23.4p in the £1 following the deal compared to the 0.2p they would have faced if Travelodge had gone to the wall.
The New York hedge funds and Goldman Sachs who now own Travelodge will be investing £75 million into refurbishing many of the remaining hotels.