softbank seeks to gain control over wework parent company amid cash-flow crisis

SoftBank Seeks to Gain Control Over WeWork Parent Company Amid Cash-Flow Crisis

Business

SoftBank has prepared a funding scheme to take charge of WeWork Companies Inc. Further, it could sideline Adam Neumann, founder of the American company. The bid of SoftBank Group, an investment firm, could save WeWork, the parent company We Co. With the fall of the real estate company’s scheduled IPO, currently, We Co. has a cash-flow crisis. Reportedly, the company had planned to take up multi-billion dollars from its public offering to sponsor its continued operations. SoftBank is already an owner of one-third of the real estate company. Through the latest bid, the investment agency aims to pour some billion dollars in additional capital and liability in the company. So the effort will offer SoftBank a significant role in turning around WeWork’s operations.

The miscalculated IOP has already cost Adam his leadership position at the co-working leasing business. Last month, Adam had announced he was resigning as CEO after a delay of its IPO between an intensity over its leadership and estimation. SoftBank’s latest financing pitch could remove Mr. Adam from WeWork’s operations and business in the future. For now, the investment firm is the only life-saving option the company has. Citing the current circumstances, it is unclear whether the deal will occur or not.

As per the American company’s representative, WeWork has preserved a large Wall Street financial agency to organize a financial backing. Even more, around 60 funding sources have signed non-disclosure agreements. Apart from this, the executive noted sponsors are negotiating with the company’s management along with its bankers. According to sources familiar with the matter, the company is seeking to lay off its workers and curb its expansion. All in all, the company is in discussions to have some fresh investors aboard. Sebastian Gunningham and Artie Minson, WeWork’s newly appointed CEOs, said they have decided to suspend their IPO to concentrate on core business.

Arya Harrington

Arya, our senior correspondent for business updates, have worked in the industry for more than a decade as an executive and in other roles. Right now, she focuses on covering business updates that matter to not just the commons but also professionals like investors. She is a great lover of books and is planning on writing the ultimate guide on business analytics.

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