WeWork chases new financing as cash crunch looms
Failed IPO has left company running short of cash at faster rate than expected
Until a few weeks ago WeWork was one of the world’s most highly valued private companies. Photograph: Kiyoshi Ota/Bloomberg
WeWork’s bankers are scrambling to complete a new debt financing package as soon as next week to buy time to restructure after the company’s failed initial public offering left it running short of cash at a faster rate than expected.
Two people briefed on the fundraising efforts said the office company’s cash crunch was so acute that it had to raise new financing no later than the end of November. Fitch Ratings downgraded WeWork’s credit rating last week to CCC+, warning that the lossmaking company’s liquidity position was “precarious”.
JPMorgan Chase, the Wall Street bank that had led the office company’s IPO preparations, is leading the financing negotiations and considering a contribution to the new package, several people familiar with the matter said.
The debt will come at a considerably higher cost to WeWork than it paid for its previous loans, reflecting the abrupt change of fortunes for what was until a few weeks ago one of the world’s most highly valued private companies.
– Copyright The Financial Times Limited 2019