The Wall Street owner of hotel chain Travelodge is behind the radical restructuring of Cineworld that risks leaving UK ratepayers millions of pounds out of pocket.Cineworld collapsed into administration last year owing creditors £4 billion. After a failed auction of the UK and Ireland business, a secretive group of so-called vulture funds took it over this year.Their identities have been kept secret, but now it can be revealed that they are led by GoldenTree, the Wall Street owner of Travelodge, which negotiated aggressive cuts in rents to landlords after a bitter row in 2020.GoldenTree has also been in a long-running dispute with the state of Puerto Rico after buying up billions of dollars of sovereign-backed debt.Dubai-based Sirius Capital and Mayfair fund Blantyre Capital can also be disclosed as owning about 12 per cent of the chain.

Blantyre declined to comment. GoldenTree and Sirius did not respond.

The names of the hedge funds have been kept secret ever since Cineworld’s lenders seized control of the business through a debt-for-equity swap.

Legal filings referred to Cineworld’s UK and Ireland shareholders as “financial institutions and entities managed and/or controlled by various investment funds which were financial creditors”.

A complex corporate structure that ends with opaque entities based in the Cayman Islands has been set up to protect the names of the ultimate beneficial owners of the company.

Cineworld was last week given the green light by a London judge to begin talks over a radical restructuring of the business in which many of its landlords may have to accept steep cuts to rent.

Cineworld operates across 128 sites, and employs 4,400 people, in the UK and Ireland. Bosses argue that a failure to restructure its leases will render the business insolvent. Sources close to the shareholders said that they were positive about Cineworld’s fortunes if a deal with landlords could be struck.

Six closures have already been announced. Under the deal put forward to landlords, six more sites would move to a “zero rent” agreement. Ten others would switch to turnover rents, receiving about 50p for every ticket sold.

And a further 33 sites would have rents cut to “market levels” as deemed by Cineworld’s own advisers. But landlords of these venues argue that the proposed terms are actually below market rates, and cutting them would allow Cineworld’s owners to benefit from a surge in profitability from new releases in early 2025.

Nine of Cineworld’s properties are owned by local councils, which used ratepayer money to invest in them to help boost their finances. They are Barnsley, South Oxfordshire, Monmouthshire, Huntingdonshire, Wakefield, Warrington, Derbyshire, West Suffolk, and Hinckley & Bosworth in Leicestershire.

Barnsley last week became the first of the councils to break cover over the situation. It built a multiplex for Cineworld at the city’s Glass Works complex in 2022, handing the chain a £2 million incentive payment.

The revelation that GoldenTree is behind the Cineworld rent cuts may raise hackles within the UK real estate sector due to the US hedge fund taking a similar approach to Travelodge during the pandemic.

Travelodge was plunged into a bitter row with its landlords in 2020 when the hotel chain withheld March quarterly rental payments. It then proceeded to demand rent reductions or deferrals to lower its rent by 80 per cent in 2020 and 50 per cent 2021.

GoldenTree was one of three shareholders at the time that had seized control of the hotel chain following a debt-for-equity swap in 2012. The US fund now owns Travelodge outright, and the chain last year posted record annual profits.

Comparatively little is known about the Dubai-based Sirius Capital. The fund is run by Bhanu Vittalam, the former group head of restructuring at Emirates NBD, one of the Middle East’s biggest lenders.

London fund Blantyre, meanwhile, helped spearhead a €1 billion debt-for-equity swap that allowed its client Strix Holdings to take control of Greek ferry company Attica in 2023.