If WeWork had already avoided bankruptcy in 2019, the company specializing in “coworking” is finding its old demons. It would therefore consider filing for bankruptcy next week, announces the Wall Street Journal, according to “people familiar with the matter”. Already in bad shape and with a debt of nearly three billion dollars, the group saw its shares fall by 40% on Tuesday, a drop of 96% over one year. However, WeWork was doomed to success, once valued at up to $47 billion.
Now, the company, based in New York, plans to file for bankruptcy protection in New Jersey, otherwise known as “Chapter 11.” If WeWork reaches this situation, it is in particular because the group “did not pay interest” to its creditors on October 2, reports the Wall Street Journal. The company had 30 days to make its payments, which have still not reached the creditors. WeWork still obtained “an agreement” with them, granting it “seven additional days to negotiate with stakeholders before a payment default is initiated”. For the moment, WeWork refuses to comment on these “speculations” to Le Figaro and assures the Wall Street Journal that it has “positive conversations with [its] main financial partners”.
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WeWork has been navigating troubled waters for several years now, with a situation that has deteriorated due to teleworking and rising interest rates. Last August, the group warned the American stock market regulator that there was “substantial doubt about the company’s ability to continue as a going concern.” Over the first six months of the year, the company had already lost billions of dollars. Four new administrators, specialized in complex financial restructurings, were then appointed to organize the rest of WeWork. They had successfully negotiated a restructuring plan with creditors and prepared for bankruptcy. In total, 777 locations and 906,000 workstations, spread across 39 countries, are threatened with closure.
In 2019, the company had already come close to bankruptcy. In question, a controversial management of its founder Adam Neumann, since ousted from the group. Its main shareholder, Softbank, then came to the rescue by injecting ten billion dollars. WeWork finally managed to enter Wall Street in October 2021 via a Spac (Special purpose acquisition company). But the lull was only short-lived for the “coworking” star.