Guy Parsons, the CEO of Travelodge Hotels Ltd., Thame, U.K., stepped down on Thursday to be replaced by his predecessor Grant Hearn.
The move comes as the company’s owner Dubai International Capital is negotiating a financial restructuring that will cede ownership to the New York City-based hedge funds Avenue Capital Group and GoldenTree Asset Management as well as investment bank Goldman Sachs.
Dubai International Capital bought the British budget hotel company, known for its £10 (US$15.90) per night guestrooms, for US$1.3 billion in 2006 with credit from two hedge funds. Dubai International Capital could stand to lose up to £400 million (US$634 million) from the debt-for-equity deal because of the amount of debt it took on to purchase Travelodge.
The Daily Telegraph reported on Thursday that Travelodge sought a £10 million (US$15.9 million) emergency loan, followed by a further £60 million (US$95.6 million) facility in February to stay solvent.