Secure Income REIT PLC Statement re Travelodge CVA (9987O)

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                    [phone] 
   Nick Leslau                                         [e-mail] 

Mike Brown

Sandy Gumm

   Stifel Nicolaus Europe Limited        [phone] 
   (Nominated Adviser)                         [e-mail] 

Stewart Wallace

   FTI Consulting                                     [phone] 
   (PR Adviser)                                        [e-mail] 

Dido Laurimore

Claire Turvey

Eve Kirmatzis

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June 04, 2020 07:43 ET (11:43 GMT)