Secure Income REIT PLC Statement re Travelodge CVA (9987O)
June 04 2020 - 7:43AM
UK Regulatory
TIDMSIR
RNS Number : 9987O
Secure Income REIT PLC
04 June 2020
4 June 2020
Secure Income REIT plc
("the Company" or "SIR")
Statement re Travelodge CVA
The Company has reviewed the Creditors Voluntary Arrangement
(CVA) proposals put forward yesterday by Travelodge Hotels Limited
and is providing the following information as an initial summary of
the potential implications of the CVA in relation to the hotels
owned by Secure Income REIT plc, should the CVA be approved by
creditors.
Travelodge has announced the terms of a CVA which, if approved,
would result in an estimated short term aggregate reduction in rent
of GBP23.4 million, equivalent to a total of 10 months' rent spread
for two years across SIR's entire 123 hotel Travelodge portfolio.
The proposed rent reductions would represent 67.7% of rents
otherwise receivable from Travelodge from 1 April to 31 December
2020 and 26.1% throughout 2021. Thereafter rents will be restored
to the levels set out in the existing leases. Unlike most CVAs,
there are no proposed hotel closures or permanent rent reductions
that persist beyond the period ending 31 December 2021.
It is also proposed that the leases relating to (i) GBP23.5
million of the current passing rent on the hotels will be extended
by three years and (ii) GBP1.5 million of the current passing rent
by five years, which would if implemented increase SIR's Weighted
Average Unexpired Lease Term on the hotels by 2.75 years. Landlord
break clauses would be inserted into leases representing 88.4% of
the rent, 94% of which would be operable for five months after the
date of the CVA and 6% until the end of 2021. There would be no
tenant break clauses. In addition, there is a profit sharing
arrangement if certain earnings targets are achieved by Travelodge
whereby some of the foregone rent might be recovered.
The CVA timetable sets the vote on 17 June 2020 ahead of the
Creditors' meeting on 19 June. The Company is now scrutinising
these proposals further along with a team of expert advisors in
order to best protect its position and will report back to
shareholders at the earliest appropriate time.
For further information on the Company, please contact:
Secure Income REIT Plc +44 20 7647 7647
Nick Leslau enquiries@SecureIncomeREIT.co.uk
Mike Brown
Sandy Gumm
Stifel Nicolaus Europe Limited +44 20 7710 7600
(Nominated Adviser) stifelsecureincomereit@stifel.com
Stewart Wallace
FTI Consulting +44 20 3727 1000
(PR Adviser) SecureIncomeREIT@fticonsulting.com
Dido Laurimore
Claire Turvey
Eve Kirmatzis
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END
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