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WeWork plans to file for bankruptcy

WeWork plans to file for bankruptcy as early as next week.

Shares in the company fell by 39% to $1.40 in late trading in New York, after the Wall Street Journal first reported the news.

Share values have fallen by 96% so far this year.

The New York-based flexible workspace provider, which was once privately valued at $47bn, is now considering filing a Chapter 11 petition in New Jersey, according to sources close to the matter.

Earlier yesterday the company, which shoulders $2.9bn of long-term debt, decided to withhold an interest payment of about $6.4m.

WeWork said it had entered a seven-day forbearance agreement with its creditors after defaulting on interest payments in October. That grace period is now nearing an end.

WeWork is trying to renegotiate almost all its leases, which total more than $13bn, after raising a “substantial doubt” about its ability to stay in business. It admitted in August that its lease liabilities were “too high” and “out of step” with market conditions.

The firm’s outlook worsened after numerous top executives, including chief executive Sandeep Mathrani, chose to depart this year.

Last month, interim chief executive David Tolley took up the leadership role permanently and has been tasked with turning around the business.

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Photo © Erik Pendzich/Shutterstock (10455631f)

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