Is Travelodge edging towards bankruptcy?
Hotel chain, which Dubai International Capital bought in 2006 denies it is filing for bankruptcy Dow Jones is reporting that Travelodge (which was bought by Dubai International Capital) is close to falling into the hands of its creditors as the hotel chain struggles to sort out its huge debt pile. The newswire reports that the debt pile is over GBP 400 million ($634 million) and that current negotiations focus on a GBP60 million medium-term loan facility that requires refinancing immediately.However, the hotel chain has denied that it is filing for bankruptcy.
"All the lenders are working together to find a sensible solution to the debt structure," James Leviton, a spokesman for Travelodge, told Bloomberg. "Travelodge is not going into administration." The hotel chain issued the denial after the Sunday Times newspaper in the UK reported that the chain was weeks away from going under.
Dubai International Capital (DIC) paid GBP675 million in 2006, which included GBP478 million in debt.
Reports suggest that banks such as RBS and Barclays may have been asked to help with fundraising efforts to pay or restructure the GBP60 million medium-term loan.
"You may have read in the press that Travelodge is currently undergoing a debt restructure; this is a standard process that many big companies undertake. There is nothing to worry about; it's business as usual for us," said Guy Parsons, the company's CEO said.
"Our 499 hotels are trading well and we are on track to open the 41 hotels we announced at the start of this year. We opened our sixth hotel in Liverpool just a couple of days ago and we will be celebrating the opening of our 500th hotel next month."
Reuters reported on the same day that a number of US-based firms including Golden Tree Asset Management and Avenue Capital had helped the hotel chain with a GBP 60 million line of credit.
In January the company said it would be opening 41 hotels (3610 rooms) in 2012 and creating 1,000 new jobs across the UK. Included in these openings is Travelodge's 500th hotel at Stratford which is scheduled to open this February. "Half of these London properties will be open before the end of July, including London Greenwich and London Excel Centre," the hotel chain said.
2012 CPI Financial. All rights reserved.
Provided by Syndigate.info an Albawaba.com company
 Printer friendly
 Cite/link
 Email
 Feedback
| |
| Publication: | CPI Financial |
|---|---|
| Geographic Code: | 7UNIT |
| Date: | Feb 20, 2012 |
| Words: | 393 |
| Previous Article: | Project finance: Al Dur Power & Water Company in Bahrain starts operation. |
| Next Article: | Looking beyond the Greek tragedy. |
| Topics: | |