AGL 40.00 Decreased By ▼ -0.16 (-0.4%)
AIRLINK 129.53 Decreased By ▼ -2.20 (-1.67%)
BOP 6.68 Decreased By ▼ -0.01 (-0.15%)
CNERGY 4.63 Increased By ▲ 0.16 (3.58%)
DCL 8.94 Increased By ▲ 0.12 (1.36%)
DFML 41.69 Increased By ▲ 1.08 (2.66%)
DGKC 83.77 Decreased By ▼ -0.31 (-0.37%)
FCCL 32.77 Increased By ▲ 0.43 (1.33%)
FFBL 75.47 Increased By ▲ 6.86 (10%)
FFL 11.47 Increased By ▲ 0.12 (1.06%)
HUBC 110.55 Decreased By ▼ -1.21 (-1.08%)
HUMNL 14.56 Increased By ▲ 0.25 (1.75%)
KEL 5.39 Increased By ▲ 0.17 (3.26%)
KOSM 8.40 Decreased By ▼ -0.58 (-6.46%)
MLCF 39.79 Increased By ▲ 0.36 (0.91%)
NBP 60.29 No Change ▼ 0.00 (0%)
OGDC 199.66 Increased By ▲ 4.72 (2.42%)
PAEL 26.65 Decreased By ▼ -0.04 (-0.15%)
PIBTL 7.66 Increased By ▲ 0.18 (2.41%)
PPL 157.92 Increased By ▲ 2.15 (1.38%)
PRL 26.73 Increased By ▲ 0.05 (0.19%)
PTC 18.46 Increased By ▲ 0.16 (0.87%)
SEARL 82.44 Decreased By ▼ -0.58 (-0.7%)
TELE 8.31 Increased By ▲ 0.08 (0.97%)
TOMCL 34.51 Decreased By ▼ -0.04 (-0.12%)
TPLP 9.06 Increased By ▲ 0.25 (2.84%)
TREET 17.47 Increased By ▲ 0.77 (4.61%)
TRG 61.32 Decreased By ▼ -1.13 (-1.81%)
UNITY 27.43 Decreased By ▼ -0.01 (-0.04%)
WTL 1.38 Increased By ▲ 0.10 (7.81%)
BR100 10,407 Increased By 220 (2.16%)
BR30 31,713 Increased By 377.1 (1.2%)
KSE100 97,328 Increased By 1781.9 (1.86%)
KSE30 30,192 Increased By 614.4 (2.08%)
Print Print 2019-10-24

SoftBank confirms multi-billion-dollar WeWork bailout

SoftBank announced on Wednesday it will pump billions of dollars into struggling office-sharing start-up WeWork, in a deal that will see co-founder Adam Neumann taking a huge payout and exiting the board.
Published October 24, 2019

SoftBank announced on Wednesday it will pump billions of dollars into struggling office-sharing start-up WeWork, in a deal that will see co-founder Adam Neumann taking a huge payout and exiting the board.

The package, which involves new financing, speeds up already pledged money and includes a new tender offer for existing shareholders, is worth a total of $9.5 billion.

Neumann, who has already been forced to step down as chief executive, will exit the board for an "observer" role, but is said to be receiving more than $1.5 billion as he departs.

SoftBank Group's Marcelo Claure will take over as executive chairman of the board.

The agreement caps a turbulent period for the once-vaunted start-up, which was valued by some at around $47 billion at the start of the year, and represents a significant shot in the arm as the company haemorrhages money.

"SoftBank has decided to double down on the company by providing a significant capital infusion and operational support," SoftBank chairman Masayoshi Son said in a statement.

"The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow," added Claure in the statement.

The package includes $5 billion in new financing, as well as a commitment to speed up an existing pledge of $1.5 billion.

SoftBank will also launch a tender offer of up to $3 billion for existing shareholders, at $19.19 a share, expected to start in the fourth quarter of 2019.

SoftBank, which already held 29 percent of WeWork, will increase its stake to "approximately 80 percent", but said this did not constitute taking control.

It said it would not hold a majority of voting rights at any general stockholder meeting or board of directors meeting and "does not control the company".

"WeWork will not be a subsidiary of SoftBank. WeWork will be an associate of SoftBank," the statement said.

SoftBank Group shares closed down 2.51 percent at 4,190 yen in Tokyo, though they were off lows seen earlier in the day. The plan provides much-needed funds for WeWork, which sources have said must raise at least $3 billion to cover its financing needs through the end of the year.

Copyright Agence France-Presse, 2019

Comments

Comments are closed.