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Home / Business / WeWork bailout: SoftBank will own most of the company as Adam Neumann receives large payout

WeWork bailout: SoftBank will own most of the company as Adam Neumann receives large payout



SoftBank ( SFTBF ) will pump $ 5 billion into The We Company and accelerate a $ 1.5 billion equity investment originally owed to the company next year, according to a statement released of the two companies.

SoftBank, which is already WeWork's largest investor, also offers to buy up to $ 3 billion of stock from existing investors and shareholders. SoftBanks Vision Fund will also exchange all of its interests in regional WeWork joint ventures across Asia, except the Japanese joint venture, for shares in WeWork.

Overall, the agreement will give SoftBank 80% ownership of the beleaguered startup, a huge boost over the nearly 30% that SoftBank and Vision Fund are reported to already own.
The rescue package is expected to value WeWork at around $ 8 billion, according to a person familiar with the matter. That's a fantastic fall from a $ 47 billion peak, and an added embarrassment for a company that didn't plan to go public long ago. At lower valuation, SoftBank ( SFTBF ] would have put more money into WeWork till now than the company is worth.
 SoftBank & # 39; s Big Tech Ambitions in Doubt It Losses Billions on WeWork and Uber

SoftBank's shares fell 2.5% in Tokyo after the deal was announced.

Adam Neumann, WeWork's controversial co-founder, will also step down from the company's board and become a board observer, leaving his role as CEO Marcelo Claure, CEO of SoftBank, becomes CEO of an expanded WeWork board The board will have voting control of Neumann's shares.

The announcement did not reveal details of Neumann's payout, but the WeWork founder could get off with up to almost $ 1.7 billion. Softbank's offer to buy Neumann's shares has been capped at $ 975 million, and the package includes an additional $ 500 million loan to repay a credit line, plus a $ 185 million "consulting fee" for SoftBank, the person familiar with the matter said .

Details of Neumann's payout were first reported by The Wall Street Journal.

The agreement provides a turbulent two months for WeWork, in which Neumann oversaw a disastrous attempt to take the regular public. The long-awaited IPO was dropped after investors valued the valuation and criticized the shared workspace of the supplier's business management.

But in a statement, SoftBank CEO Masayoshi Son managed the trifle power.

"It is not uncommon for the world's leading technological disruptors to experience growth challenges that WeWork just faced," Son said.

Claure – who already has several roles as CEO of SoftBank's international arm, SoftBank's Chief Executive Officer, Executive Chairman of Sprint ( S ) and runs points at SoftBanks Latin American Innovation Fund – now tasked with turning a struggling unicorn under intense scrutiny.

"The new capital SoftBank provides will restore momentum for the company, and I am committed to delivering profitability and positive free cash flow," Claure said in a statement.


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