WeWork Reaches Restructuring Deal with Creditors
WeWork Inc. and its major financial backers have struck a new restructuring deal to get the workspace provider out of bankruptcy, the Financial Times reported Monday afternoon. The deal sidelines a competing financing proposal from co-founder Adam Neumann.
Under the agreement, which has been approved in its outline by a U.S. Bankruptcy Court judge, senior creditors would infuse WeWork with a fresh $450 million in capital. Yardi Systems, which controlled some 35 million shares of WeWork stock through an entity known as Cupar Grimmond LLC, would become the majority stakeholder with a $337-million investment that would give it control of 60% of WeWork.
A separate group of hedge funds will put in the remaining $113 million of the new money investment, in exchange for 20% of WeWork, reported the FT. Entities that hold $4 billion of the co-working group’s pre-bankruptcy debt — including SoftBank, WeWork’s biggest backer — will receive the remaining 20% of the company. The new WeWork will carry no debt.
Bloomberg News reported that U.S. Bankruptcy Judge John K. Sherwood said it was up to the lenders to decide whether to negotiate with Neumann, who has offered to buy WeWork for $500 million and reportedly plans to oppose the restructuring deal. Creditors are slated to vote on the agreement May 30.
