Travelodge’s biggest landlord offers alternative plan to avoid CVA

22 May 2020

One of Travelodge’s biggest landlords is gathering support for an alternative payment plan in an effort to stop the operator going through a CVA process, Property Week has reported.

In a letter to landlords, seen by Property Week, Nick Leslau, owner of Secure Income REIT, says Travelodge’s negotiating stance is “unreasonable and revised terms are unacceptable to the vast majority of those property owners we have spoken to”. Secure Income REIT owns 123 Travelodge hotels and has a rent roll of £28.3m.

Leslau is trying to prevent Travelodge forcing through a CVA, which it has threatened to do if landlords do not agree to a rent restructuring that cuts 80% of rent payments for some properties until the end of 2022.

The property tycoon is proposing an alternative agreement, in which April quarterly rent is deferred, and the hotel operator pays 80% rent across all of its properties until the end of the year. “Lease extensions reflecting the amounts written off will be required in December 2023,” he added.

“This would be a constructive step in a genuine attempt to reach agreement to support Travelodge’s business and should reduce the chances of a CVA in two ways – demonstrating the presence of a majority that might defeat any potential CVA vote, whilst tabling a generous offer worth some £70m to Travelodge in support of trade during 2020.”

Travelodge, owned by Goldman Sachs and two New York-based hedge funds, owns more than 580 hotels and recently reported earnings of £129.1m with net debt of around £311m. In March, the hotel operator drew down £40m from a revolving credit facility.

Travelodge declined to comment.