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Deal would cut hotel company’s debt load by $4 billion
Blackstone Group has reached an agreement to restructure the balance sheet of Hilton Worldwide, The Wall Street Journal reports. Hilton's lenders and Blackstone are finalizing a deal that would cut the hotel company's $20 billion debt load by about $4 billion.
The agreement would involve Blackstone funds contributing $800 million of new equity, which will be used to buy back debt at a discount. It would also extend the maturity of some debt issues.
The Journal reports restructuring will help shore up Hilton's finances as it struggles through a downturn in the hotel industry. For months, some analysts have said there was a risk that Hilton might not be able to generate enough cash to stay current on its debt. Without a restructuring, Blackstone could have been forced to sell Hilton assets to cover its roughly $900 million in interest payments, according to the analysts.
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