Versatile workplace house firm WeWork has filed for Chapter 11 chapter safety, a surprising change in fortunes for the as soon as high-flying startup co-founded by Adam Neumann and funded by SoftBank, BlackRock and Goldman Sachs.
The New York-based firm, which raised greater than $22 billion, listed each belongings and liabilities between $10 billion and $50 billion in its submitting in a federal courtroom in New Jersey. The chapter submitting is proscribed to areas within the U.S. and Canada, the corporate stated.
WeWork India has grown into one of many strongest models within the WeWork franchise and is essentially insulated from chapter as it’s majority owned by Embassy Group. The Indian unit is being profitable and doesn’t want exterior capital to function, the Indian head instructed native media final week.
WeWork’s IPO suffered setbacks in 2019 attributable to considerations over losses and governance, resulting in the withdrawal of the IPO and the departure of CEO Neumann. Neumann’s departure led to a pricey settlement with WeWork and SoftBank in 2021. The corporate ultimately went public by way of a SPAC merger, valuing it at $9 billion, and projecting $2 billion in money working revenue by 2024.
WeWork restructured its stability sheet this yr, decreasing debt by $1.5 billion and deferring debt maturities till 2027. Regardless of these efforts, the corporate’s market worth has fallen to lower than $50 million, and a chapter may result in the cancellation of present shareholder shares, with bonds now buying and selling at distressed ranges.
“Now’s the time for us to maneuver ahead by aggressively addressing our legacy leases and dramatically enhancing our stability sheet,” WeWork CEO David Tolley stated in a press release.
“We now have outlined a brand new class of working and these steps will enable us to stay the worldwide chief in versatile work. I’m very grateful for the assist of our monetary stakeholders as we work collectively to strengthen our capital construction and speed up this course of via the Restructuring Help Settlement. We stay dedicated to investing in our world-class merchandise, companies and workforce of staff to assist our neighborhood.”
In its earnings launch in August, WeWork publicly acknowledged “substantial doubts” about its skill to proceed as a going concern.
Extra to observe.