Leslau calls for Travelodge landlord unity on counter-proposal
Property tycoon Nick Leslau has called for fellow Travelodge landlords to support a counter-proposal rebuffing the operator’s request for a £146m rent waiver.
Earlier this month Travelodge, which counts hedge funds Goldentree Asset Management and Avenue Capital among its shareholders, asked its landlords to waive up to £146m in rent as part of its recovery plan.
The operator subsequently threatened to pursue a company voluntary arrangement unless landlords complied.
Property tycoon Nick Leslau has called for fellow Travelodge landlords to support a counter-proposal rebuffing the operator’s request for a £146m rent waiver.
Earlier this month Travelodge, which counts hedge funds Goldentree Asset Management and Avenue Capital among its shareholders, asked its landlords to waive up to £146m in rent as part of its recovery plan.
The operator subsequently threatened to pursue a company voluntary arrangement unless landlords complied.
Leslau, whose Secure Income REIT owns 123 Travelodge hotels, sent fellow Travelodge landlords a letter this week to gain support for his counter-proposal.
In the letter, seen by EG, Leslau suggests deferring Q2 rent arrears, as well as 20% of monthly rent owed during the second half of this year.
It is understood that these terms are worth around £70m to the hotel group.
“If we can speak with one voice it will increase the chances of reaching a consensual solution,” Leslau said in the letter.
“By agreeing to these terms in principle we would be able to demonstrate unequivocally a majority position to Travelodge’s owners.”
According to the document, Leslau’s proposal involves the following points:
a. No grading of properties
b. April-June 2020 (Q2) arrears deferred in accordance with point ‘f’ (below)
c. Monthly in advance rent payments from July 2020 to December 2021
d. From July 2020 – December 2020 landlords defer 20% of monthly rent, to be accrued as debt on same terms along with the Q2 arrears
e. Normal quarterly lease payments resuming January 2022
f. The arrears at ‘b’ and ‘d’ above will be written off on an equal quarterly basis during 2023 provided that full lease terms are honoured throughout 2021, 2022 and 2023.
Lease extensions reflecting the amounts written off will be required in December 2023.
g. Service charges, head rents and other obligations shall be payable by Travelodge as they fall due, without exception.
h. These proposals do not impact any rights of property owners in relation to a CVA or any other liquidation event.
Leslau said that a unified approach would represent a “constructive step in a genuine attempt to reach agreement to support Travelodge’s business and should reduce the chances of a CVA”, since it demonstrated “the presence of a majority that might defeat any potential CVA”.
Travelodge’s landlords include institutions, charities, private and public companies and local authorities.
To send feedback, e-mail pui-guan.man@egi.co.uk or tweet @PuiGuanM or @estatesgazette
