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Travelodge landlords have voted in favour of a restructuring plan that should ensure that around 10,000 jobs are saved.
The CVA will see Travelodge receive a 38% total rent reduction with the group paying landlords a total of £230m between April 2020 and the end of 2021.
Following the approval, Travelodge said: “The creditors of Travelodge have today approved its proposed company voluntary arrangement (CVA).
“The successful vote will enable Travelodge to navigate the short-term challenges facing the business as a result of the Covid-19 pandemic.”
It added: “The directors of Travelodge would like to thank its creditors for their support during this period and look forward to re-opening and welcoming guests back to its hotels in the near future.”
Earlier this week, reports suggested that landlords might reject the CVA proposal following continued uncertainty around a proposed £40m investment by its owners.
However, Travelodge reportedly came back with a set of concessions in order to “sweeten” the deal.
According to inside sources, the hotel chain proposed an increase to the share of profits that would be granted to landlords above a £200m threshold.
It also pledged that shareholders would not be able to take money out of the company until landlords had been fully repaid. In addition, it reportedly promised to make the process of property-owners exercising break clauses in their contracts easier.
The hotel chain first revealed its plans to launch a CVA earlier this month.
At the time, a Travelodge insider told Sky News that the restructuring proposal was “not a traditional CVA”, as it would result in no site closures. In addition, they said that all 564 sites would revert to their full rent agreements from the end of next year.
A spokesperson told Hotel Owner: “Travelodge has been an extremely successful business and it has suddenly been faced with a very difficult situation.
“The proposal does ask for some big injections of cash by shareholders and substantial temporary rent reductions from landlords – but it is fair and will help the company get through the crisis, which is in everyone’s interests.”
They added that the move was needed in order to save 10,000 jobs and “secure the long term future of the business”.
