A sign marks the location of a WeWork office facility on August 14, 2019 in Chicago, Illinois.
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Without the Softbank bailout agreement, rolling space sharing company WeWork would have run out of money next Friday, sources told CNBC's David Faber.
WeWork announced on Tuesday that the Japanese conglomerate SoftBank will provide $ 5 billion in new financing and up to $ 3 billion in a tender offer for existing shareholders. SoftBank will also accelerate an existing $ 1
After closing and following the tender offer, SoftBank's fully diluted WeWork financial ownership will be approximately 80%.
WeWork also said it would appoint SoftBank Chief Operating Officer Marcelo Claure as CEO, while former WeWork CEO Adam Neumann will become a "board observer."
Disclosures that WeWork was about a week away from running out of cash have been on the heels of a lot of bad news for the company since it launched its IPO prospectus in August. The filing revealed a huge $ 900 million loss in the first six months of 2019. It also reported at the time that it had long-term leases of $ 17.9 billion.
Estimates of the company's value have declined rapidly since then. What was once expected to be one of 2019's hottest IPOs worth $ 47 billion has turned into a series of mishaps that have seen the company's value decline to around $ 8 billion.
Co-CEOs Artie Minson and Sebastian Gunningham replaced founder Neumann in September after he drew investor ire for his unusual leadership style and apparent conflicts of interest.
CNBC's Faber first reported on Monday that SoftBank would bail WeWork's parent company, The We Co.
The Wall Street Journal reported Tuesday that the SoftBank deal would leave Neumann as much as $ 1.7 billion in exchange for his agreement to resign as chairman and surrender his voting rights.