WeWork, the troubled co-working business, is going to close some of its properties around the world in order to ”increase liquidity and strengthen its balance sheet,” according to the BBC. The members of the company at the Southbank building in London informed the BBC that the firm had written them, saying it was closing ”unprofitable” locations. They were told to leave by November 30, and WeWork promised to offer them “alternative workplace solutions.”
Meanwhile, the business’s stock dropped 37% after the company announced plans to file for bankruptcy as soon as next week, according to CNN. WeWork announced earlier on Tuesday that it had reached an agreement with creditors to extend a 30-day grace period for making interest payments on part of its debt, which was set to expire this week. According to the company’s timeline, the new “forbearance agreement” will expire on November 6. WeWork Global, based in the United States, stated a few months ago that there is “substantial doubt” regarding the company’s capacity to continue as a going concern. SoftBank, a Japanese giant, invested tens of billions of dollars to help the business, but it has continued to lose money.
WeWork declaring bankruptcy would be a surprising turn of events for the company
However, WeWork India maintained on Wednesday that this will have no effect on its operations, claiming that the Indian operation is sponsored by real estate giant Embassy Group and has had constant development. WeWork India has 50 locations spread across seven cities: New Delhi, Gurugram, Noida, Mumbai, Bengaluru, Pune, and Hyderabad. WeWork India CEO Karan Virwani stated in a statement on Wednesday, “WeWork India is a separate entity from WeWork Global.” The latest news about a possible bankruptcy and Chapter 11 filing in the United States has no bearing on the members and stakeholders in India.”
The company declaring bankruptcy would be a surprising turn of events for the company, which was privately valued at $47 billion in 2019. The company has been attempting to move on from Adam Neumann, its co-founder and former CEO, whose antics irritated investors. Mr Neumann’s forced resignation in late 2019 following WeWork’s botched IPO, in which the business’s valuation plunged from $47 billion to less than $10 billion, has put the company in trouble. WeWork has been a famous star in the sharing economy, leaving a massive imprint in major city commercial real estate throughout the world.
