LONDON, February 20, 2012 /PRNewswire/ --
Travelodge will get financing from two New York-based hedge funds as the UK budget hotel chain owned by Dubai International Capital restructures debt.
Avenue Capital Group and GoldenTree Asset Management have underwritten a medium-term facility of £60m ($95m), James Leviton, a spokesman for Travelodge, said after the Sunday Times reported the company had six weeks to raise the money or it could face bankruptcy.
"All the lenders are working together to find a sensible solution to the debt structure," Leviton said. "Travelodge is not going into administration."
Avenue Capital and GoldenTree, which have held Travelodge's debt since 2006, may ask the senior lenders Royal Bank of Scotland Group, Investec, Barclays and Babson Capital Management to participate in the fundraising, Leviton said.
"GoldenTree has been a very supportive lender to Travelodge for many years and continues to work closely with the company and management," the hedge fund said in a statement on Sunday.
The first budget hotel brand to launch in the UK in 1985, Travelodge now operates over 490 hotels and over 35,400 rooms across the UK, Ireland (11) and Spain (4). Travelodge plans to grow its estate to 1,100 hotels and 100,000 rooms by 2025. Over 13 million people stayed with Travelodge last year and 90% of reservations are currently made online at travelodge.co.uk, where room rates start at £19 per night. The chain employs over 6,000 staff.