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WeWork said to talk to JPMorgan for $ 5 billion in debt financing



  • WeWork and lenders led by JPMorgan discuss a $ 5 billion credit line for the struggling company, Bloomberg reported Friday.
  • The commercial real estate giant could run out of cash as soon as next month, Bloomberg and Financial Times reported.
  • The amount of funding it is now said to apply for is greater than previously reported, and the amount of time it is now assumed to have before running out of cash is significantly shorter.
  • WeWork expected to raise $ 3 billion last month in an initial public offering that would also have unlocked $ 6 billion in additional debt financing, but all that fell through when it scrapped its IPO.
  • Read all of Business Insider's WeWork coverage here.

WeWork talks to lenders about a $ 5 billion lifeline in an effort to prevent imminent insolvency, Bloomberg reported Friday.

JPMorgan, who previously lent money to the commercial real estate giant and was to become a leading underwriter on it since the failed public offering, is leading the effort, according to both Bloomberg and a previous report in the Financial Times. A deal could be finalized as soon as next week, both outlets reported.

Both reports said WeWork could run out of money as soon as next month without new funding. That timeline is much shorter than previous estimates, including by Business Insider. These earlier projections indicated that WeWork, without another cash infusion, could probably last until the middle of next year.

Read this: WeWork could meet a cash crunch as soon as February. Industry watchers think SoftBank, its lenders and the entire industry have too much at stake to let it go.

A spokesman for JPMorgan, Tasha Pelio, declined to comment on the reports. WeWork reps did not immediately respond to emails seeking comment.

WeWork's cash is getting low

The amount of new funds said to be under discussion is about a quarter larger than previous reports suggested the company was seeking, adding further indication of the pressure it is under.

WeWork had plans to raise about $ 3 billion in a stock exchange listing last month, a move that would have unlocked another $ 6 billion in debt financing from JPMorgan and other lenders. When the IPO fell, so did the original debt agreement.

The company would pay a high price for the new loans. As the interest rate will be significantly higher than the Libor rate plus 4.75 percentage points it would pay under the previous, but now canceled, debt agreement, according to the two reports.

Since the company scrapped its IPO, WeWork has been blowing out CEO Adam Neumann and a number of executives, planning to sell or shut down subsidiaries, including WeGrow Private School, and put the company's jets on sale.

Do you have a tip about WeWork or another company? Contact this reporter by email at twolverton@businessinsider.com, message him on Twitter @troywolv or send him a secure message via Signal at 41

5.515.5594. You can also contact Business Insider securely via SecureDrop.

/www.businessinsider.com/works-used-disounts-to-convince-tenants-to-relocate-new-locations-2019-9

Do you have a tip about WeWork or another company? Contact this reporter by email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.


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