Travelodge to propose CVA

Travelodge to propose CVA

Just last month, Travelodge hit the news for looking at a CVA again.

Today we are told that a CVA is to be unveiled which includes a new commitment from shareholders to inject up to £40m of new equity.

The borrowing capacity has been increased to £100m, compared to the £60m initial amount.  

An insider for the hotel chain says that this CVA will be not result in any hotel closures and all its 564 sites would revert to their full rent agreements from the end of next year. Additionally, landlords would receive £230m in rent for the period between the successful conclusion of the CVA and 31 December 2021, despite being under the mechanism, as well as being promised payments equating to a 50% share of any earnings before interest, tax, depreciation and amortisation above £200m during the next three years.

The CVA plan is currently being questioned by landlords so the prospects of it being endorsed by the majority of creditors is unclear.