HALIFAX – Holloway Lodging Corp. (TSX:HLC) has sold its Travelodge franchise business for $21 million.
The Halifax-based company says it expects to record a $6.4-million gain from the sale, equivalent to 33 cents per share in the first quarter of its 2015 financial year.
Holloway said the franchise operation isn’t core to its business, which is hotel ownership and operation.
The Travelodge franchise business was acquired last year when Holloway bought Royal Host Inc.
At the time of the friendly takeover, about 90 hotels had Travelodge franchise agreements with Royal Host.
Under the deal, Holloway will receive $16 million in cash and $5 million in subordinated secured notes. The company said it plans to use the money from the ale to repay a loan used to finance its acquisition of Royal Host.