NEW YORK Jan 20 Highland Hospitality Corp, the
hotel chain owned by real-estate mogul Joseph E. Robert Jr.'s
investment firm, is nearing a deal to hand ownership to
creditors led by Ashford Hospitality Trust Inc (AHT.N) and
Prudential Financial Inc (PRU.N), the Wall Street Journal
reported on Thursday.
The newspaper said the deal would restructure nearly $2
billion in debt and is expected to be done outside of
bankruptcy court. It could eliminate more than $600 million in
debt for Highland, which owns 28 upscale hotels ranging from
the Ritz Carlton in Atlanta to the Hilton Boston Back Bay.
Citing people familiar with the matter, the Journal said
talks are fluid and a deal is not expected before February. The
negotiations have dragged on longer than expected and the deal
could still fall apart, its sources said.
In August, Highland defaulted on $868 million in junior
debt. Roberts, via his investment vehicle JER Partners, has
been negotiating with different creditors in an attempt to
salvage the company.
Now, the creditors, who include Ashford, Prudential and
private-equity giant Blackstone Group LP (BX.N), have
negotiated a broad deal that would keep Highland out of
bankruptcy, slash about a third of outstanding debt and
transfer ownership. Maturities for debt remaining on Highland's
books will be extended by five years, the report said.
JER will likely be wiped out in the deal, the people
familiar with the situation said, according to the Journal.
There was no immediate comment from JER, Ashland,
Prudential or Blackstone in response to calls from Reuters.
(Reporting by Steve James; editing by Andre Grenon)