The Blackstone Group (NYSE:BX), a private equity firm which owns Hilton Hotels Corp., has denied reports of a breakup of the hotel group to facilitate debt repayment obligations.

Hilton Hotels Corp.

Blackstone purchased Hilton Hotels for $26 billion in 2007 with associated debt obligations worth $20.6 billion – due for repayment in 4 years’ time.

Hilton has 3,200 hotels and 545,000 rooms in over 77 countries, which coupled with Blackstone’s other hotel assets, make the private equity group the world’s largest hotel operator.

However, Blackstone wrote down Hilton’s value by 49% last year alone.  While servicing the debt isn’t a serious problem for Blackstone, and values could rise in the near future, there’s two ways to look at it – Blackstone the private equity firm with a feduciary responsibility to it’s investors, and Blackstone the hotel operator willing to wait out the current dip in real estate values and hotel industry revenues.

A report in the Independent cited sources close to the firm as saying that Blackstone is looking at a range of options for the hotel group, including public listings for parts of the chain along geographic lines, debt-for-equity swaps with lenders, as well as trade sales of portfolios of hotels to rival companies.

A Financial Times report confirms that they’re looking at options to alter Hilton’s capital structure, such as a debt-for-equity swap. However, Blackstone denies that they’re planning asset sales. Furthermore, the Wall Street Journal quotes a Blackstone spokesman as saying that a break-up plan is not on the table.

If they’re not planning asset sales, and there’s no plan for a break-up, then this isn’t really that much left to discuss.