Clifford Chance (CC), Freshfields Bruckhaus Deringer and Kirkland & Ellis have taken lead roles on Travelodge's £635m debt restructuring, which will result in the company's bank debt being almost halved.

CC advised Travelodge on the deal, with London-based head of insolvency Mark Hyde (pictured) taking the lead.

Despite growing profits year-on-year since the onset of the recession, Travelodge has been weighed down by its bank debt. The restructuring will see £235m of the debt written off, with £71m to be repaid, taking total bank debt down to £329m.

Kirkland's City arm has advised Goldman Sachs and New York hedge funds Avenue Capital and GoldenTree Asset Management, which have effectively taken control of the budget hotel chain from Dubai International Capital (DIC) through a debt-for-equity swap.

London restructuring partner Kon Asimacopoulos took the lead for the new owners, who will provide a £75m cash injection to Travelodge as part of the financial restructuring, £55m of which will be used to refurbish its older hotels.

Freshfields advised Royal Bank of Scotland, Barclays, Investec and investment firm Babson Capital – Travelodge's biggest lenders – with restructuring partner Ryan Beckwith in the lead. DIC did not have any legal advisers.

In addition to the restructuring, Travelodge has also agreed a Company Voluntary Arrangement (CVA), which is expected to reduce rent levels at certain sites. The company 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.

The news comes after DIC purchased the debt-laden hotels chain in 2006 from Permira in a deal which saw CC advise the European private equity house.