Dubai-owned hotel denies bankruptcy risk
London, February 20, 2012
Travelodge, the UK budget hotel chain owned by Dubai International Capital, said the company faced no bankruptcy risk and would soon be getting finance from two New York-based hedge funds for restructuring debt.
Avenue Capital Group and GoldenTree Asset Management have underwritten a medium-term facility of GBP60 million ($95 million), revealed James Leviton, a spokesman for Travelodge, 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," he added
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.
Travelodge was the first budget hotel brand to launch in the UK in 1985 and it now operates over 490 hotels and over 35,400 rooms across the UK, Ireland (11) and Spain (4).-TradeArabia News Service