The bankrupt shared office space provider plans to emerge from Chapter 11 bankruptcy protection by June by restructuring hundreds of leases, company officials said on Tuesday.
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Bankrupt shared office space provider WeWork announced on Tuesday that it plans to emerge from Chapter 11 bankruptcy protection at the end of May as it expects to save up to $8 billion through lease restructuring.
The company became an ambitious $47 billion unicorn more than a decade ago before running into trouble. Agree to modify the lease with the landlord According to executives who filed for bankruptcy protection in November, the current situation is more reflective of the commercial real estate market.
“We are working hard to build a strong and sustainable WeWork,” CEO David Tolley said in a statement. “We remain committed to emerging from a global real estate and financial restructuring later this quarter and expect to do so with virtually no debt.” of this goal and serve as a continued leader in our industry, operating more than 20 million square feet of real estate in more than 20 countries around the world.”
WeWork is rejecting (or has rejected) another 150 leases, while another 150 leases will remain intact.
The announcement said these negotiations would reduce the company’s total future rent commitments by 40%. WeWork also announced that it has reached an agreement with 92% of secured noteholders to convert their bonds into equity and eliminate more than $3 billion of the company’s $3.6 billion in secured debt.
The company has reportedly been in talks with landlords since September, before declaring Chapter 11 bankruptcy. The negotiation process continued until the company went bankrupt. The company has struggled to rein in losses as it works to renegotiate leases, losing $122 million in February alone, according to the bankruptcy filing.
“We are extremely grateful to the many landlords who have worked with us to reach agreements,” said Peter Greenspan, global head of real estate. “We want to work with landlords as partners to build the future of WeWork, and our goal since we began this process has been to find a positive future in as many buildings as possible. Although there is more work to be done, and remains Some tough decisions will need to be made, but the majority of the work on the project is now complete.”
Once a venture capital darling, WeWork ran out of money after its post-IPO financial mismanagement was exposed, leading to the ouster of founder Adam Neumann — He is currently bidding to buy back the company for $500. mega. Before the company declared bankruptcy in November, the post-pandemic office market further eroded the company’s profits, leading to thousands of employees being laid off.
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