The “coworking” giant, WeWork, on the verge of bankruptcy

2023-11-01 14:35:29

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The company would be ready to file for bankruptcy as early as next week, according to the Wall Street Journal.

If WeWork had already avoided bankruptcy in 2019, the company specializing in “coworking» finds his old demons. It would therefore consider filing for bankruptcy next week, announced the Wall Street Journalaccording to “people familiar with the matter“. Already in bad shape and with a debt of nearly three billion dollars, the group saw its shares fall by 40% on Tuesday, a drop of 96% over one year. However, WeWork was doomed to success, once valued at up to $47 billion.

Now, the company, based in New York, plans to file for bankruptcy protection in New Jersey, in other words under “chapter 11“. If WeWork arrives at this situation, it is in particular because the group “did not pay the interest» to its creditors on October 2, reports the Wall Street Journal. The company had 30 days to make its payments, which have still not reached the creditors. WeWork still obtained “a deal» with the latter, granting him “seven additional days to negotiate with stakeholders before a payment default is initiated“. For the moment, WeWork refuses to comment on these “speculations” nearby Figaro and ensures Wall Street Journal to have some “positive conversations with [ses] main financial partners».

Also read: Zoom, WeWork… The sudden fall of companies that had their moment of glory during the pandemic

A doubt “about the company’s ability to continue its activities”

WeWork has been navigating troubled waters for several years now, with a situation that has deteriorated due to teleworking and rising interest rates. Last August, the group warned the American stock market regulator that there was “substantial doubt about the company’s ability to continue as a going concern“. Over the first six months of the year, the company had already lost billions of dollars. Four new administrators, specialized in complex financial restructurings, were then appointed to organize the rest of WeWork. They had successfully negotiated a restructuring plan with creditors and prepared for bankruptcy. In total, 777 locations and 906,000 workstations, spread across 39 countries, are threatened with closure.

In 2019, the company had already come close to bankruptcy. In question, a controversial management of its founder Adam Neumann, since ousted from the group. Its main shareholder, Softbank, then came to the rescue by injecting ten billion dollars. WeWork finally managed to enter Wall Street in October 2021 via a Spac (Special purpose acquisition company). But the lull was only short-lived for the “coworking” star.