Private equity giant Blackstone Group is close to a deal with the Hotel Del Coronado to restructure its debt and take a majority stake in the property, Reuters reported, citing a story in the Wall Street Journal. The hotel, near San Diego, is currently owned by investors including Strategic Hotels & Resorts Inc., Kohlberg Kravis Roberts & Co. and KSL Resorts. Under the terms of the deal, Blackstone and those existing shareholders will contribut capital to cut the hotel’s debt load, Reuters said.
(Reuters) – U.S. private equity company Blackstone Group LP is close to a deal with the owners of Hotel Del Coronado, near San Diego, to restructure the hotel’s debt of $630 million and become a major owner of the property, the Wall Street Journal said.
Under the terms of the pending deal, Blackstone and existing owners Strategic Hotels & Resorts Inc, Kohlberg Kravis Roberts & Co and KSL Resorts will contribute enough capital to cut the beachfront hotel’s debt load to $425 million, the Journal said, citing people familiar with the matter.
In the proposed deal, Blackstone would provide about $100 million of new capital and convert into equity a slice of less than $20 million of the Del Coronado’s mezzanine, WSJ said.
A call from Reuters to Blackstone was not immediately returned. (Reporting by Fareha Khan; Editing by Jon Loades-Carter)