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WeWork is in talks with JPMorgan to initiate a cash crunch




WeWork is in talks with banks including JPMorgan to arrange funding that can help the office-sharing company avert a looming cash crisis, The Post has learned.

The cash infusion for WeWork's parents We Company – forced earlier this week to cancel an initial public offering aimed at raising $ 3 billion – could come in the form of either debt, equity or a combination of both, said a source close to the situation.

The talks, which are also getting participation from Goldman Sachs, are still in their early stages and are fluid, sources warn. According to a source, one alternative has banks arranging a loan as large as $ 2 billion or more.

The Japanese technology conglomerate Softbank, which has taken heat over the disastrous $ 1[ads1]1 billion bid on WeWork, is not expected to participate in JPMorgan-led funding at this time, said one source.

JPMorgan and We spokesmen declined to comment. Goldman Sachs did not immediately respond to requests for comment.

The embattled office space had lined up $ 6 billion in debt financing contingent on the IPO, which was canceled amid a swell of controversy over lavish spending and alleged self-dealing by co-founder Adam Neumann, who was dismissed as CEO last week .

Without more capital, We Co. run out of money next year, Sanford C. Bernstein said in a Wednesday report. The San Francisco-based startup had $ 2.5 billion in cash as of June 30, and is currently losing $ 700 million per quarter, Bernstein said.

WeWork's $ 702 million bond sold last year is currently trading at $ 85 cents, according to reports.

WeWork is taking steps to curb losses and satisfy creditors. Last week, it replaced Neumann with new CEOs, Artie Minson and Sebastian Gunningham, who are reportedly planning to sell assets and lay off thousands of employees.

Neumann, who is now a non-executive, has deducted as it became clear the company's valuation was headed below $ 20 billion ahead of the IPO, as short as $ 47 billion it received in its latest funding round led by Softbank.

JPMorgan has loans tied to WeWork and has been its main lender.

Jamie Dimon Bank, along with UBS and Credit Suisse, helped Neumann with a $ 500 million personal credit line that allowed him to buy buildings that he then leased back to WeWork.

JPMorgan also led the financing of WeWork's $ 850 million acquisition of the Lord & Taylor building. The bank is also a major financial lender, and WeWork is one of the largest commercial tenants in New York City.



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