WeWork plans to file for bankruptcy as early as next week – source

wework-plans-to-file-for-bankruptcy-as-early-as-next-week-–-source
WeWork plans to file for bankruptcy as early as next week – source

WeWork, backed by Japan’s SoftBank Group Corp, is planning to file for bankruptcy as early as next week, according to a source familiar with the matter. The company is facing significant challenges due to its massive debt and substantial losses. The news of WeWork’s potential bankruptcy caused its shares to drop 32% in extended trading, bringing its total decline for the year to approximately 96%.

The Wall Street Journal reported that WeWork is considering filing a Chapter 11 petition in New Jersey. However, the company declined to comment on these reports. Earlier on Tuesday, WeWork announced that it had reached an agreement with creditors to temporarily postpone payments for some of its debt. However, this grace period is coming to an end.

As of June, WeWork had a net long-term debt of $2.9 billion and over $13 billion in long-term leases. These financial obligations, combined with rising borrowing costs, have put significant strain on the company. WeWork’s potential bankruptcy filing would be a dramatic turn of events for a company that was once valued at $47 billion in 2019. It would also be a major setback for SoftBank, which has invested billions in WeWork.

WeWork has been in turmoil since its failed attempt to go public in 2019. Investors were skeptical of its business model, which involved taking long-term leases and subleasing them for shorter terms. Concerns over the company’s losses further eroded investor confidence. Despite managing to go public in 2021 at a much lower valuation, WeWork has continued to struggle financially.

In August, WeWork raised doubts about its ability to sustain its operations. The company has experienced significant executive turnover, with several top executives, including CEO Sandeep Mathrani, leaving this year. WeWork’s challenges have persisted, and its financial situation remains uncertain.

The article was written by Anirban Sen in New York, Manas Mishra and Manya Saini in Bengaluru, and edited by Shailesh Kuber and Anil D’Silva. The reporting adheres to the Thomson RushHourDaily Trust Principles.

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Hi, I'm Alex Perez, an experienced writer with a focus on lifestyle and culture news. From food and fashion to travel and entertainment, I love exploring the latest trends and sharing my insights with readers. I also have a strong interest in world news and business, and enjoy covering breaking stories and events.

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