Flexible workspace operator WeWork has filed for bankruptcy in the US.
The company, which was once valued at $47bn, filed for Chapter 11 protection yesterday and claimed it maintained the “strong support of its key financial stakeholders”.
It added it had entered into a restructuring support agreement with holders representing approximately 92% of its secured notes to drastically reduce the company’s existing funded debt and “expedite” the restructuring process.
WeWork said it would now look to “further rationalise” its commercial office lease portfolio and that it had a “deliberate and value maximising lease rejection plan that is expected to position the company for operational and financial success”.
As part of its filing, the company said it was requesting the ability to reject the leases of certain locations which are “largely non-operational” and all affected members had received advanced notice.
WeWork’s locations outside of the US and Canada are not part of the Chapter 11 process and the company said its global operations would continue as usual.
David Tolley, CEO of WeWork, said: “It is the WeWork community that makes us successful. Our more than half-million members around the world turn to us for the best-in-class spaces, hospitality, and technology that our 2,500 dedicated employees and valued partners provide. WeWork has a strong foundation, a dynamic business, and a bright future.
“Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet. We defined a new category of working, and these steps will enable us to remain the global leader in flexible work. I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the restructuring support agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community.”
WeWork has retained Hilco Real Estate to assist with lease renegotiations.
