US: Reports from the US suggest that WeWork plans to file for bankruptcy as early as next week.
The Wall Street Journalquoted a source familiar with the matter, and said the SoftBank Group-backed company is struggling with massive debt and major losses.
WeWork shares fell 32 per cent in extended trading on Tuesday after the WSJ first reported the news. They have fallen roughly 96 per cent this year.
New York-based WeWork is considering filing a Chapter 11 petition in New Jersey, the WSJ reported, citing people familiar with the matter.
Earlier on Tuesday, WeWork said it had entered into an agreement with creditors for temporary postponement of payments for some of its debt, with the grace period nearing an end.
The company had net long-term debt of $2.9 billion as of June end and more than $13 billion in long-term leases.
The company was privately valued at $47 billion in 2019. It has been in turmoil ever since its plans for a 2019 IPO were called off.
It finally went public in 2021 at a much-reduced valuation. Its major backer, Japanese conglomerate SoftBank, has invested tens of billions in WeWork, but the company has continued to lose money.
WeWork raised “substantial doubt” about its ability to continue operations in August, with numerous top executives, including CEO Sandeep Mathrani, departing this year.
Click here to learn about some of the reasons for WeWork’s problems in our podcast interview with Zoe Ellis-Moore of Spaces to Places.
