LONDON—It is “business as usual” as Travelodge works through a debt restructuring that could see a potential change in owners, CEO Guy Parsons said in a statement.
“You may have read in the press that Travelodge is currently undergoing a debt restructure; this is a standard process that many big companies undertake. There is nothing to worry about; it’s business as usual for us,” he said Sunday via a statement posted on the company’s website.
Reuters on Sunday reported Travelodge had secured £60 million (US$94.89 million) in funding as the budget chain owned by Dubai International Capital worked to restructure its debt.
The medium-term loan facility, which replaces an existing line, was underwritten by New York-based Golden Tree Asset Management and Avenue Capital, according to Reuters, citing people familiar with the matter.
Avenue Capital and GoldenTree Asset Management, which have been creditors to Travelodge since 2006 when DIC bought the business for £675 million (US$1.1 billion), intend to take control of the hotelier in return for their funding, The Guardian reported Sunday. They are talking to Travelodge's main lenders—Investec, Barclays, Royal Bank of Scotland and Babson—about whether they want to be involved in the rescue.
Travelodge and Dubai International Capital did not immediately respond to requests for comment.
The news has not negatively impacted performance within Travelodge’s portfolio, Parsons said.
“Our 499 hotels are trading well, and we are on track to open the 41 hotels we announced at the start of this year," he said. "We opened our sixth hotel in Liverpool just a couple of days ago and we will be celebrating the opening of our 500th hotel next month.”
Travelodge in January announced it was planning to open 41 hotels comprising 3,610 rooms during 2012 throughout the U.K. The new properties, at an investment of £246 million (US$390 million), would boost the company's portfolio to 537 hotels comprising more than 39,000 rooms.
--Compiled by Patrick Mayock
