Feb. 20 (Bloomberg) -- Lenders to Travelodge Ltd. are meeting in London tomorrow about restructuring the U.K. budget hotel chain’s debt, according to two people with knowledge of the situation.
The restructuring may include a debt-for-equity swap, said the people, who declined to be identified because the talks are private. Travelodge is owned by Dubai International Capital LLC, the Persian Gulf emirate’s private-equity firm, which borrowed to fund its $1.3 billion purchase of the hotel chain in 2006.
Hedge funds Avenue Capital Group LLC and GoldenTree Asset Management LP underwrote a new 60 million-pound ($95 million) loan to the hotel chain, Travelodge said yesterday after the Sunday Times reported the company had six weeks to raise money or face bankruptcy. The New York-based funds are meeting tomorrow with other Travelodge senior lenders, the people said.
The financing from Avenue Capital and Goldentree will ease immediate concerns about Travelodge’s liquidity, according to a DIC spokeswoman in London, who declined to be identified citing company policy. DIC wrote off its investment in Travelodge in 2008, she said, without providing further detail of the financing.
A Travelodge spokesman in London didn’t respond to an e- mail seeking comment.
Travelodge runs more than 460 hotels in Britain, Ireland and Spain, according to its website.
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