WeWork’s restructuring plan has been given the go-ahead by the bankruptcy court, paving the way for the troubled co-working company to exit Chapter 11 in the coming weeks.
The plan will see WeWork taken over by lenders, with a majority stake owned by software group Yardi. WeWork said it will exit bankruptcy protection in mid-June.
“Due to the tireless efforts of our team, and the unwavering loyalty of so many of our members, we have completed our Chapter 11 proceedings with success well beyond our initial expectations,” said chief executive David Tolley.
“In one of the largest and most complex restructurings, we have achieved extraordinary outcomes. Over the past year, we have also seen strong demand across the WeWork system and increased our member net promoter scores.”
WeWork said the plan will wipe off more than $4bn (£3bn) of debt, meaning it is now debt-free, with future rent expenses slashed by more than a half. It said this will “end the substantial operating losses that characterised the company’s years of hypergrowth and subsequent contraction”.
Over the past nine months, WeWork has negotiated with practically all of its landlords globally, exiting many spaces and renegotiating the terms on which it takes others.
Peter Greenspan, global head of real estate, said: “We have worked closely with the largest landlords around the world and one thing is clear: they believe in the future of the flexible office and they believe in the future of WeWork.”
“As global office demand continues to move toward flexible approaches, only WeWork has the technology, community and data to support landlords in creating truly outstanding offerings for modern organisations. We’re grateful to each and every landlord who came to the table to collaborate with us over the past nine months, and we look forward to building on our existing partnerships far into the future.”
Photo © Erik Pendzich/Shutterstock
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