WeWork assesses rescue plans from SoftBank and JPMorgan
The board of WeWork, the cash-starved landlord of shared office space, weighs competing financial rescue packages from SoftBank and a financial consortium led by JPMorgan Chase, according to two people with knowledge of the case.
SoftBank, a Japanese technology giant that is already the largest external shareholder of WeWork, offers to take a controlling stake in the company by accelerating a $ 1.5 billion investment it had planned to make next year and by purchasing up to 3 billion in shares that other investors own, the people said. SoftBank also offers to put together loans totaling $ 5 billion from a consortium of financial institutions, including SoftBank.
The JPMorgan proposal consists of several parts, including new bonds, some of which will have high interest rates, according to people with knowledge of their plans.
The potential cash infusion comes at a critical juncture for WeWork, which scrapped an initial public offering and breathed out its charismatic chief executive last month after Wall Street cracked down on the huge losses and unconventional corporate governance structure.
WeWork, once considered one of the world's most famous start-ups, was valued by SoftBank at $ 47 billion in January, but had considered selling shares in the initial public offering for a valuation down to $ 15 billion. SoftBank's latest offering to the company values it at just under $ 8 billion.
