Hotel cash pressure
Travelodge in rent talks as Leslau pursues legal action
Travelodge in Queen Street, Edinburgh
UPDATED 20 April: Hotel chain Travelodge has called in restructuring advisers as it faces a battle with its landlords over rent payments.
Lenders to Britain’s second-biggest hotel chain have hired the investment bank Moelis and the accounting giant Deloitte to seek a deal with its landlords, including rent-free periods.
Travelodge has 570 hotels and has kept 48 open for key workers and vulnerable people.
The company did not pay its quarterly rent bills last month, telling landlords that its “comprehensive plan to stabilise the business” included asking them to suspend payments.
The talks, reported by the Sunday Times, come at a time of severe pressure on hotels and restaurants following a period of rapid expansion.
Now it has emerged that property investor Nick Leslau’s Secure Income REIT has begun legal action against the owners of the chain over the non-payment of rent.
In a statement to the London Stock Exchange today (20 April), Secure Income told investors: “Discussions with Travelodge’s senior team have been ongoing for a number of weeks and while they have yet to provide any proposals for dealing with the outstanding amounts due, they have indicated that a plan should be forthcoming.
“While we are extremely aware of and sensitive to the challenges facing so many businesses today in this unprecedented pandemic, Travelodge has over 580 hotels with more than 44,500 rooms and recently reported record earnings of £129.1 million with net debt of c. £311 million.
“It is owned by large, multinational investment businesses in Goldman Sachs, Avenue Capital and GoldenTree. We are disappointed and surprised that they have not yet presented a proposal.
“In light of this, Secure Income REIT plc has already reluctantly initiated actions to recover this debt, but remains hopeful that this matter can still be settled prior to those options being fully pursued.”