Travelodge, a budget UK hotel chain once owned by Permira, is struggling to push through a major restructuring.
The company was bought from Permira in 2006 by Dubai International Capital for £675m (€858m). After breaching loan agreements earlier this year, it was taken over by its lenders GoldenTree Asset Management, Avenue Capital Group and Goldman Sachs, which intend to reduce its debt pile to £329m from £635m and inject £75m, of which £55m will be used to renovate more than 11,000 rooms and 175 hotels starting early next year.
However, in order to slash its debt burden, it needs to reach a deal with landlords known as a company voluntary arrangement (CVA). This will enable the company, which has 500 hotels, to sell 49 hotels and cut rent by 25 per cent in another 109. The CVA has to be voted through by 75 per cent of creditors.
KPMG, which is running the CVA, has said that landlords at the underperforming hotels would see a return of 23.4p in the pound. If the company goes into administration, the landlords would get just 0.2p to the pound.