Hotel chain Travelodge has unveiled a series of a major renovation plans worth up to £55 million to improve its outlets across the UK.
The move comes as the debt-laden company reached an agreement on a financial restructuring programme that incorporates a Company Voluntary Arrangement (CVA). Its latest action will see some of the firm's estimated £1 billion of debt wiped away by banks and landlords will instead take a cut of the current rates that the company pays on the properties it chooses to place a hotel. Following the agreement of the CVA, Travelodge is due to receive a major cash injection of £75 million allowing this work to take place.
Officials have stated, of this investment, £55 million has been earmarked to improve a number of its assets across the country, providing a better service for customers that use the hotel chain. Within these plans include renovating 11,000 rooms and 175 hotels across Travelodge's estate with the first phase of the refurbishment project being in early 2013, continuing through the year until it reaches the estimated prediction date of summer 2014.
Grant Hearn, chief executive of the hotel chain, said: "The financial restructuring, including the CVA, will leave Travelodge in a much stronger position going forward and will ensure a long-term, sustainable future for the business. Once this joint process is completed, Travelodge’s debt, interest costs and lease liabilities will be significantly reduced."
As part of the company's financial restructuring programme, Travelodge announced that £235 million will be written off its total debt with £71 million being repaid to the owed parties. This would bring the overall amount of funds in the red down from £635 million to £329 million.
Officials also noted that the deadline of debt repayments had been pushed back to 2017 while the amount of interest the firm needs to pay was reduced to 0.25 per cent above LIBOR throughout 2014 providing some respite for the company to operate.
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