LXI REIT finalises sale of 66 Travelodge hotels
LXI Reit
100.80p
16:34 05/03/24
LXi REIT has finalised the sale of 66 Travelodge-branded hotels to the Travelodge group, it announced on Monday, for a total of £210m.
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The FTSE 250 company said the transaction aligned with the properties' latest book value as of 30 September.
It said the majority of the sale proceeds would be allocated towards debt reduction, a strategic move aimed at decreasing the group's loan-to-value ratio from 38% to 34%.
Additionally, Travelodge's share of group rent would decrease from 18% to 11%.
The sale and the subsequent debt repayment were not expected to have a substantial impact on LXi REIT's earnings due to anticipated debt cost savings.
Completion of the sale was slated to take place on 28 February.
“We are delighted to be transacting with Travelodge on this landmark sale of 66 hotels for £210m, which is in line with the latest book value,” said Simon Lee, chief executive officer of LXi REIT Advisors.
“Most of the sale proceeds will be used to pay down debt, reducing group loan-to-value to 34%, and Travelodge's proportion of group rent will reduce to 11%.
“The sale and debt repayment are not expected to have a material impact on the Company's earnings.”
At 0801 GMT, shares in LXi REIT were up 0.19% at 103.4p.
Reporting by Josh White for Sharecast.com.