US office owner WeWork is in trouble: creditor protection is being examined

A group of Wall Street funds that owns the owner of offices in the United States and York The borrowed money, according to a media report, is considering the possibility of filing for bankruptcy protection. which group Black stone, King Street Capital And Capital Brigade The newspaper reported that the company it owns is in preliminary talks about options to restructure the company Wall Street Journal (The Wall Street Journal) on Thursday, citing people familiar with the matter.

The funds indicated they would support filing for Chapter 11 bankruptcy protection. Shares of WeWork rose about 12 percent to 13 cents in late trading on Wall Street. BlackRock, King Street, Brigade and WeWork were not initially available for comment.

Great doubts about the continuation of existence

The office space provider is a prime example of a US startup that is grossly overvalued and has been in trouble for some time. It was not until the beginning of August that the company acknowledged that there were “significant uncertainties” about its continued existence in light of expected losses and cash requirements. WeWork has announced that it now wants to negotiate cheaper rents, reduce costs and raise new capital over the next 12 months.

Almost 600 million euros “burned”

Under the protection of US bankruptcy law, companies can protect themselves from creditors’ access for a certain period of time. In the first six months of the year alone, WeWork claims to have spent $646m (€597.87m), and at the end of June the company still had $205m in cash. Just this past spring, WeWork reduced its debt by $1.5 billion and negotiated longer maturities.

Co-working functions are no longer required

WeWork is grappling with the post-COVID-19 trend toward co-working and job cuts in the technology sector, where most tenants come for coworking spaces. Occupancy of 777 sites in 39 countries is only 72 percent on average, especially in the USA and Canada where there are capacity utilization issues.

In 2019, WeWork was about to go public before investors had doubts about the company’s eccentric founder and boss. Adam Newman came. In 2021, the company makes a leap to the stock exchange by merging into a blank corporate structure (SPAC).