SoftBank is in talks with WeWork to increase a $1.5-billion investment the Japanese technology group has agreed to put into the office leasing company.
Nothing about WeWork looks normal, and Wall Street may finally be waking up
SoftBank’s most recent investment valued WeWork at $47 billion, while public market investors balked at buying at even one-third of that. SoftBank had agreed to buy $1 billion of the $3 billion of shares WeWork expected to sell in its IPO, and both sides were ready to change the terms of the $1.5-billion investment to reflect the IPO price, but that deal was scrapped after the listing was postponed.
A $6-billion loan package was also contingent on the IPO, and WeWork is now attempting to work out a new financing package, given the chance it will fail to complete a flotation this year or next. The group burnt through more than $2.5 billion of cash in the first half of 2019. Revenues have more than doubled over the last two years as WeWork expanded to have offices in more than 500 locations in 111 cities, but losses have climbed in tandem. For every dollar the company earned in revenue last year, it lost roughly two.The financial strain on the company has become evident in corporate debt markets. The yield on a $702-million WeWork bond maturing in 2025 climbed to 9.8% on Wednesday.
© The Financial Times Ltd. 2019. All Rights Reserved. FT and Financial Times are trademarks of the Financial Times Ltd. Not to be redistributed, copied or modified in any way.
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
SoftBank likely to funnel $1 billion more into WeWork after delayed IPO: FTSoftBank Group Corp is planning to pump an extra $1 billion or more into WeWork ...
Read more »
Kik, A $1 Billion App Plagued By Child Abuse, ClosesKik is closing as the Kin cryptocurrency founder gets ready for battle with the SEC. Those who saw Kik as a crime haven may well be relieved.
Read more »
Saudi Aramco seeks project finance loan of more than $1 billion: sourcesSaudi Aramco has asked banks to submit proposals for a project finance loan of m...
Read more »
Walmart expands $1 a day education program to deepen push in healthcareWalmart Inc is expanding an education program it began last year by offering hea...
Read more »
Kik, A $1 Billion App Plagued By Child Abuse, ClosesKik is closing as the Kin cryptocurrency founder gets ready for battle with the SEC. Those who saw Kik as a crime haven may well be relieved.
Read more »