Creditors – including landlords across the UK – voted in favour of the plan that will see rent payments slashed across more than 100 hotels and 49 hotels offloaded to other operators.
The company voluntary arrangement (CVA) is designed to allow Travelodge to exit poorer performing leases while also free itself of a crippling debt burden.
A significant number of the properties are owned by millionaire Nick Leslau’s investment vehicle Prestbury, which is understood to have supported the move.
The group, which operates more than 500 hotels across the UK, Ireland and Spain and employs more than 6,000 staff, secured backing from 97 per cent of Travelodge creditors that voted, including 96 per cent of landlords. It required 75 per cent of creditors to back the deal.
It will now offload 49 hotels to other operators, while the landlords of a further 109 will take a 25 per cent cut in rent. The remaining 347 will be unaffected.
Under the deal, Travelodge will be able to shake off some of the mammoth debts it has inherited from former private equity owners.
Bank debt of £235m will be written off and £71m will be repaid, reducing total bank debt to £329m – which will be extended until 2017.