SoftBank reportedly prepares package to save WeWork
SoftBank is reportedly preparing a bid that would save We Co, the parent company of the struggling startup WeWork, just weeks ahead of its potential collapse.
The office-sharing company had planned a large initial public offering until last month when questions emerged over governance and its profit outlook. Co-founder and chief executive Adam Neumann stepped down as the firm's valuation moren than halved to less than $20bn.
The new financing pitch from SoftBank, which would give it more than 50% of the company, would further remove Neumann from the company’s operations and business, the Wall Street Journal reported, citing unnamed sources.
If the SoftBank bid failed, a separate plan to raise $5bn in debt with JP Morgan could be put into play, the report added.
“WeWork has retained a major Wall Street financial institution to arrange a financing,” a spokesperson for We Co. wrote in an email cited in the report.
“Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
Goldman Sachs, a co-lead on the IPO and among a number of lenders on a $6bn loan to WeWork that has since collapsed, is not going to extend further financing for the time being.
If the company is unable to raise new financing before the end of November, We Co could face bankruptcy.