Japanese telecoms and internet company SoftBank Group Corp has confirmed a multi-billion deal to rescue the owner of shared office space firm WeWork, which last month terminated plans for an initial public offering (IPO).
The parent company We Company was valued at US$47bn in a SoftBank investment report early this year but its valuation was later slashed to around US$20bn, forcing the IPO to be pulled.
READ: WeWork owner reportedly accepts SoftBank's US$10bn takeover: media[hhmc]
The New York-based company lost more than US$900mln in the first half of 2019, up 25% from a year earlier, even as its revenue doubled to US$1.54bn, as it burned through cash to expand.
Under the new deal the Japanese conglomerate, which already held a third of WeWorks shares, will provide US$5bn in new financing and up to US$3bn for existing shareholders, plus the acceleration of an existing US$1.5bn payment obligation scheduled for April 2020.
After closing, SoftBanks ownership will be 80%, making We Company an associate rather than a subsidiary of the Japanese firm.
Softbank's chief operating officer Marcelo Claure will be appointed as We Company's executive chairman, while WeWork founder Adam Neumann – who resigned as chief executive last month Read More – Source
