WeWork's SoftBank financing could mean full exit for Adam Neumann

22 Octobre, 2019, 12:19 | Auteur: Auguste Feret
  • SoftBank has reportedly offered US$5 billion in new money to We Work in the form of debt

Neumann would be left with less than 10% of the shares and voting rights at the company, according to three people briefed on the plan.

Claure, one of SoftBank chief Masayoshi Son's key lieutenants, previously served as CEO of USA carrier Sprint and oversees SoftBank's Latin America fund.

Neumann has also taken $700m out of the company through personal loans and stock sales.

SoftBank Group Corp offered close to $10bn to WeWork owner The We Company, its employees and its investors on Monday under a plan to keep the struggling United States office space-sharing start-up afloat. The startup had amassed more than US$10 billion in commitments from SoftBank. It is also proposing to accelerate a previous $1.5 billion equity commitment to WeWork in the form of warrants that are due in April, the sources added. The company reported $1.9 billion in losses in 2018 as it expanded rapidly.

A deal could give WeWork a reprieve as it scrambles to cut costs.

Neumann could step down from The We Company's board as part of the deal with SoftBank and become an adviser, according to the sources.

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Neumann now controls an economic stake of just over 20% in an investment vehicle with his co-founder, Miguel McKelvey. As its estimated valuation cratered, WeWork last month ousted Chief Executive Officer Adam Neumann and, eventually, pulled its IPO paperwork.

Softbank is ready to invest an additional $4 billion to $5 billion in WeWork, taking a majority stake in the NY company while valuing it at $8 billion overall, the source said, asking not to be identified.

SoftBank has lined up Mizuho Financial Group Inc as part of its syndication of the $5 billion debt package, one of the sources said. The proposal from the Wall Street lender was set to include roughly $2 billion in unsecured debt, structured as payment-in-kind notes that carried a coupon of 15%.

JPMorgan Chase & Co.is expected to present a separate financing package to the WeWork board, another person said. The company is expected to run out of money as soon as next month.

The price of the company's bonds rallied Monday, rising from just over 84 cents on the dollar to a high of nearly 86 cents.

WeWork - which declined to comment on the issue - had been valued at more than $47 billion earlier this year. Not to be redistributed, copied or modified in any way.

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