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Blackstone considers restructure of Hilton debt

11 Aug 2009

Private equity group Blackstone is looking to restructure the debt of Hilton, the hotel group it acquired in 2007, according to the Financial Times.

The report cited people close to the company as saying that while Blackstone was considering many options for the chain, it had ruled out the sale of assets.

The private equity firm is rumoured to be considering a debt-for-equity swap ahead of the debt repayment deadlines approaching in four years’ time.

A spokesperson for Blackstone told Dow Jones International News, however, that plans for a breakup of Hilton were categorically untrue.

Since its purchase of Hilton in a deal financed with $20.6bn of debt and $5.7bn of equity, it is believed Blackstone has written down the value of its holding, estimated at $1.45bn, by nearly 50 per cent.

While Blackstone’s acquisition of the hotel was made during a peak in the market, the hospitality sector has since been hit hard by the economic downturn.

At the time of the purchase, Hilton significantly increased Blackstone’s existing hotels and leisure holdings, bringing figures up to slightly fewer than 500,000 hotel rooms.

The acquisition put Blackstone in the same league as London-listed InterContinental Hotels Group, reported to be the global market leader by number of rooms.

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