One of Britain's biggest budget hotel operators is set to walk away from 49 of its hotels and write off £700 million of its debts under a controversial rescue deal.
Travelodge, which owns more than 500 hotels across the UK, Ireland and Spain and employs more than 6,000 staff, said the deals will secure its long-term future and free it of much of its crippling debt burden.
It wants the landlords of 49 hotels to cut rents by 45% over the next six months while it seeks new operators and is asking for a 25% rent cut for a further 109 sites it wants to keep.
Travelodge said there were no current plans to close hotels or make job losses.
As part of a wider financial restructuring, it has agreed that £235 million of bank debt will be written off and £71 million will be repaid, bringing its debt down to £329 million, while a further £476 million of loan notes will also be scrapped.
The rescue plan effectively sees Travelodge seized by its three main lenders - Goldman Sachs and two American hedge funds Avenue Capital and GoldenTree Asset Management - which have taken over ownership from Dubai International Capital, which bought the chain in 2006 in a debt-fuelled deal.
Travelodge has traded well since the financial crisis, but the deal will put its future on a stable footing by strengthening its balance sheet and reducing the interest rate on its debt.
It is understood that Dubai International Capital will lose hundreds of millions of pounds as it relinquishes control.
The plans will also see £75 million of new cash injected into the company, with £55 million being spent on refurbishing 175 of Travelodge's hotels starting early next year.
Travelodge chief executive Grant Hearn said: "This is a successful brand with millions of customers and the company will emerge in excellent shape from this process."
But for the rescue deal to go through, it will need the support of 75% of creditors at a vote on September 4.
The British Property Federation (BPF) called for a review of controversial company voluntary arrangements (CVAs), which leave landlords out of pocket and allow companies to write off debts.
BPF chief executive Liz Peace said: "Once again landlords are being asked to play a significant part in rescuing a business, and a minority at that who are being asked to take a big hit to keep a far bigger business afloat."
But accountancy firm KPMG, which is organising the CVA, said landlords at affected hotels will see a return of 23.4p in the pound compared to just 0.2p if the company was to be placed into administration.
Richard Fleming, UK head of restructuring at KPMG, said: "With the support of its lenders, shareholders and landlords, the company will be able to reshape its debt and operational structure to a model more suited to these straitened times."
Travelodge is the UK's second biggest budget hotel chain behind Whitbread's Premier Inn and reported a 20% increase in profits last year to £55 million.
The group, which launched in 1985, claims to be the UK's first budget hotel brand and had 13 million visitors last year.