Landlords unhappy with Travelodge CVA plan
Travelodge CVA plan, Hotel chain Travelodge is launching insolvency proceeding in the form of a company voluntary arrangement (CVA) plan, in a move to cut rents by 40% over the 18 months and save 10,000 jobs.
The company is now reportedly locked in a battle with landlords after it refused to pay rent for the second quarter. Just a handful of the company’s 564 hotels have remained open during the pandemic.
Travelodge owners include Goldman Sachs, Avenue Capital and Golden Tree. It has £100m in cash reserves, and its shareholders have pledged to inject tens of millions of pounds in new equity, as part of a new £100m debt injection, plus up to £40m in additional equity.
The budget hotel group has said that it is not proposing any hotel closures ort job cuts, and stressed that the rent reduction will not be permanent.
Landlords response on Travelodge Plan
Landlords, however, believe Travelodge is using the pandemic as an excuse to reduce its rent costs. The leader of the Travelodge Owners Action Group, Viv Watts, said: “Going down the CVA route now is highly aggressive.” The group represents the owners of around 400 Travelodge hotels.