Leading flexible workspace provider WeWork, once valued at $47 billion, has filed for bankruptcy in the US and Canada. The company was valued at just $45 million last week.
WeWork and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code. The company said its locations outside of the US and Canada are not part of this process.
Karan Virwani, CEO at WeWork India, said in a statement that WeWork India operates independently of WeWork Global, and “our operations will not be affected in any manner”.
WeWork’s franchisees around the world are similarly not affected by the proceedings in the US and Canada.
David Tolley, CEO of WeWork said that now is the time for “us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet”.
“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community,” he said in a statement late on Monday.
Tolley said about 90 per cent of the company’s lenders have agreed to convert their $3 billion of debt into equity.
Shares of WeWork that once peaked at over $500 fell to less than $1.
WeWork had raised over $22 billion in funding from investors such as SoftBank, Insight Partners, BlackRock and Goldman Sachs.
As of June 30, WeWork's real estate portfolio consisted of 777 locations across 39 countries, supporting approximately 906,000 workstations and 653,000 physical memberships.
The company said it will continue servicing its existing members, vendors, partners, and other stakeholders in the ordinary course of business.
WeWork expects to have the financial liquidity to execute these proceedings and continue business in the ordinary course.
As part of the filing, WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice.
Karan Virwani, CEO at WeWork India, said in a statement that WeWork India operates independently of WeWork Global, and “our operations will not be affected in any manner”.
“It is a separate entity in itself, and we are not a part of this strategic reorganisation process. The Chapter 11 filing does not impact the operations of the global entity as it continues to remain in possession of its business, operating as usual,” Virwani said.
The process restructures the debts and the leases of WeWork Global in the US and Canada.
“WeWork India is backed by majority stake holder Embassy Group, and is committed to investing in the future of our business. We remain fully focused on delivering exceptional and innovative flexible workspace solutions for our members in the region,” Virmani added.
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