Home Business WeWork plans to file for bankruptcy, reports say

WeWork plans to file for bankruptcy, reports say

Troubled office-sharing firm WeWork may file for bankruptcy as early as next week, according to US media reports.

WeWork declined to comment when contacted by the BBC.

Channel 1

Earlier on Tuesday, the company told the US financial regulator it had agreed with creditors to temporarily postpone payments for some of its debt.

The firm, which as a private business was once valued at $47bn (£38.7bn), has lost almost 98% of its stock market valuation in the last year.

WeWork is considering filing for bankruptcy in New Jersey, according to the Wall Street Journal, which first reported the story.

The Reuters news agency also reported the story, citing a source familiar with the matter.

In response to the reports a WeWork spokesperson said: “We do not comment on speculation.”

WeWork shares fell by more than 40% in after-hours in New York trading on Tuesday.

The New York-based firm has been struggling since its initial attempt to sell shares on the stock market collapsed in 2019 due to concerns about its debts, losses and management.

A week before the company confirmed that its share sale had been scrapped founder Adam Neumann stepped down as chief executive.

Scrutiny of his leadership had “become a significant distraction,” the firm said.

The company was also hit hard by the pandemic as social distancing rules drove people to work from home.

WeWork finally listed on the New York Stock Exchange in 2021 with a much lower valuation.

The Japanese conglomerate SoftBank has pumped tens of billions of dollars into WeWork as it continued to lose money.

In August, WeWork raised “substantial doubt” about its ability to continue operations.

At the time, the company said in a statement that it faced challenges including softer demand and a “difficult” operating environment.

It has also seen the exit of several top executives this year, including chief executive and chairman Sandeep Mathrani.

As of the end of June WeWork had 777 locations in 39 countries around the world, according to the company.

BBC
+ posts
kiico