new york: WeWork plans to file for bankruptcy as early as next week, sources said on Tuesday (October 31), as the SoftBank Group-backed company struggles with a huge debt pile and massive losses. did.
The flexible workspace provider’s stock fell 32% in after-hours trading. wall street journal first reported the news. This year, it has fallen about 96%.
New York-based WeWork is considering filing a Chapter 11 petition in New Jersey. WSJ The report cited a person familiar with the matter.
WeWork declined to comment.
WeWork announced earlier Tuesday that it had reached an agreement with its creditors to temporarily defer payments on some debts as the grace period nears its end.
The company had net long-term debt of US$2.9 billion (RM13.8 billion) at the end of June and has signed long-term leases worth more than US$13 billion, as rising borrowing costs hit the commercial property sector. I’m here.
WeWork’s bankruptcy filing marks a stunning reversal of fortune for the company, which was privately valued at $47 billion in 2019, and a stain on investor SoftBank, which has sunk billions of dollars.
The company has been in turmoil since plans to go public in 2019 fell through amid investor skepticism about its business model of short-term rentals with long-term leases and concerns about huge losses.
WeWork’s woes haven’t eased since then. Ultimately, the company was able to go public in 2021 at a significantly reduced valuation. The company’s main backer, Japanese conglomerate SoftBank, has sunk tens of billions of dollars to support the startup, but the company continues to lose money.
WeWork said in August that a number of executives, including Chief Executive Officer Sandeep Mathrani, resigned this year, raising “serious questions” about its ability to continue operating. – Reuters