According to a report from the Wall Street Journal on Sunday, SoftBank Group has submitted a $10 billion financial package to take control of WeWork parent company, “The We Company”.
WeWork (an American commercial real estate company) is out of cash for their operations. The company had planned to raise cash (billions) by going public (IPO). But it was later shelved by new co-CEOs following concerns relating to their business model, leadership, and conflicts of interest by investors. They started cutting the cost of operations by laying off thousands of workers, selling WeGrow (educational arm business) and the company’s private jet. Last month, co-founder Adam Neumann stepped down as a result of the botched IPO.
According to the Financial Times, they could run out of money as early as November. So it’s in their best interest to look for a financial solution as quickly as possible. One of the offers on the table is from SoftBank (Japanese investment Group). The group is offering $10 billion financial package deal to WeWork.
This deal will give SoftBank, WeWork’s largest investor control of the office rental start-up and also remove Adam Neumann from the company’s business and operations. Neumann reportedly has hundreds of millions in personal bank loans. Back in January, SoftBank valued WeWork at $47 billion.
This isn’t the only deal on the table for WeWork. The company is reportedly working up a plan to raise billions of debt with JPMorgan Chase & Co.