WeWork, one of Dublin’s biggest office tenants, plans to file for bankruptcy, according to US reports

Office sharing group WeWork plans to file for bankruptcy as early as next week, the Wall Street Journal reported late on Tuesday, as the SoftBank Group-backed company struggles with a massive debt pile and hefty losses.

Shares of the flexible workspace provider fell 32 per cent in extended trading after the news was first reported. They have fallen roughly 96 per cent this year.

The company had one of the most dramatic trajectories of the last start-up boom – reaching a valuation of $47 billion (€44.5 billion) before a disastrous attempt at an initial public offering and challenges to its co-working model during the pandemic.

In a filing Tuesday, the company said it has been holding discussions with creditors about “improving its balance sheet” and taking steps to “rationalise its real estate footprint”. On Monday, the company entered into a forbearance agreement with its creditors that will end in seven days.

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The company had net long-term debt of $2.9 billion at the end of June and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial property sector.

Is the euro zone drifting into recession?

Listen | 36:57

With inflation dropping to its lowest levels in two years across the euro zone, 10 straight interest rate hikes from the European Central Bank seem to be having the desired effect. But attention now turns to stagnating growth across the bloc, with GDP (gross domestic product) falling by 0.1 per cent between July and September. And with Ireland having the largest quarterly decline in GDP (-1.8 per cent) in the third quarter, the State’s highly volatile GDP numbers were cited as one of the factors in the overall decline. As Cliff Taylor explains, Ireland “had an extraordinary run, we’re returning to earth”.And Ciarán Hancock is also joined on this episode by Irish Times business and technology journalist, Ciara O’Brien, to discuss three companies facing different challenges - X, formerly known as Twitter, has been making headlines as it is now reportedly worth less than half of what Elon Musk paid for the company a year ago. Elsewhere, Web Summit have appointed former chief executive of the Wikimedia Foundation, Katherine Maher, as their new chief executive. Maher’s appointment comes after the recent resignation of former CEO Paddy Cosgrave, following the backlash to comments he made on social media on the conflict in Gaza.And one of Dublin’s biggest office tenants, WeWork, are planning to file for bankruptcy, accord to reports in the US. The office sharing group is reportedly struggling with a massive debt pile and hefty losses.Produced by John Casey, with JJ Vernon on sound.

A spokesperson for the company said it would “not comment on speculation,” and pointed to the filing, saying the forbearance agreement will give the company “time to continue in the positive conversations with our key financial stakeholders and engage with them to implement our ongoing strategic efforts to enhance our capital structure”. The company has “a clear, long-term vision for the future”, the spokesperson said.

WeWork is one of the biggest office tenants in Dublin, occupies space at the 2 Dublin Landings building in the docklands as well as on Harcourt Road and the Charlemont Exchange near the Grand Canal.

As recently as September, the company said it remained on course to occupy most of the former Central Bank of Ireland building in Dublin, even as it was seeking to renegotiate nearly all of its leases around the world and leave some buildings it currently occupies.

[ Hines and Peterson Group secure €80m refinancing deal for Central Plaza ]

WeWork is the anchor tenant at the 11,148 sq m (120,000 sq ft) office block on Dame Street in Dublin 2, and will occupy seven of the nine floors in the building. A spokesman for developer Hines, which owns the building, said at the time that the move would not have “any impact on the commercial agreement in place for One Central Plaza”, as the building is now known.

The New York-based co-working company debuted in 2010, just as the market for venture capital was beginning a decade-long boom. With co-founder Adam Neumann as its charismatic pitchman, WeWork raised billions of dollars and grew rapidly, often doubling in revenue each year. At its peak, it was one of the world’s most valuable start-ups and operated offices around the world.

It also dabbled in somewhat tangential projects, like a private elementary school called WeGrow, two residential buildings called WeLive, and a gym concept called Rise By We.

WeWork may file its Chapter 11 petition in New Jersey, the Journal reported. – Bloomberg / Reuters