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WeWork prefers JPMorgan Chase finance to SoftBank sale

By Yana Berman

Workspace provider WeWork set on $5bn rescue deal from JPMorgan Chase

WeWork prefers JPMorgan Chase financing to SoftBank Groups control

Workspace provider WeWork, which is currently facing turmoil due to its IPO cancellation, will purportedly accept a $5bn financing package from JPMorgan Chase, Bloomberg writes.

The financing will reportedly include over $2bn of unsecured notes with a 15 per cent coupon.

According to the people familiar with the matter, the troubled company prefers this option to selling a majority stake to Japanese financial conglomerate SoftBank, which currently owns 29 per cent of its shares.

While the negotiations over financing are still under way, WeWork is expected to cut 2,000 jobs to cope with the massive losses it faces due to the cancelled IPO. Per Guardian, that represents 16 per cent of the company's total staff, and the layoffs might not stop at this point.

WeWork’s IPO was scheduled for late 2019, with its valuation initially set at $47bn. However the investors willing to participate in the listing insisted that the valuation should be somewhere between $10-18bn. One of the key reasons behind the doubts was that WeWork reported visible losses despite the evident growth of its business.

The investors also cited concerns over the CEO Adam Neumann’s controversial behaviour. He has recently lost his multi billionaire status, with his net worth hovering around $600m.

In September WeWork officially cancelled its IPO, while Neumann was forced to resign under the pressure of investors.

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