SoftBank may take control of WeWork with financing package, source says

Japanese conglomerate SoftBank is looking to assume more control over WeWork through a financing package set to significantly increase its stake in the shared workspaces firm, Reuters reported, citing a person familiar with the matter.

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The package would further dilute the influence of WeWork co-founder Adam Neumann, who stepped down as CEO of the company last month. The person also said that WeWork may run out of money as soon as the end of the year without new capital.

It was previously reported that SoftBank was in discussions to inject US$1 billion or more into WeWork, which would come in addition to the US$1.5 billion it has already agreed to put in the co-working firm next year.

The investment could open up additional financing options for WeWork, which is reported to be working on acquiring US$3 billion to US$4 billion in debt from a syndicate of banks, contingent on it raising additional capital first.

“WeWork has retained a major Wall Street financial institution to arrange a financing,” a WeWork spokeswoman said. “Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”

WeWork’s parent, the We Company, recently filed to withdraw its initial public offering plans. It was also reportedly looking to slash its workforce and slow down its expansion to decrease expenses.

“We have every intention to operate WeWork as a public company and look forward to revisiting the public equity markets in the future,” said WeWork co-CEOs Artie Minson and Sebastian Gunningham. They also previously said that they will look into the optimal timing for an IPO.

Minson and Gunningham were appointed as co-CEOs after Neumann stepped down from his role as head exec.