2023-11-07 12:05:00
Lhe American shared office giant WeWork, in great difficulty for several years, announced in a press release on Monday that it was filing for bankruptcy in order to negotiate a “significant” reduction in its debt with its creditors and restructure its activities. In order to complete this process, “WeWork and certain of its subsidiaries have initiated “Chapter 11” protection proceedings. [la loi sur les faillites, NDLR] and intend to file recognition proceedings in Canada under the Business Creditor Agreement Act,” the group announced in a statement.
The procedure does not concern its subsidiaries outside these two countries, added the group, which believes that its “global operations will continue, as usual”. “It is time for us to look to the future by vigorously attacking our old leases and considerably improving our balance sheet,” said the group’s managing director, David Tolley, quoted in the press release, for whom “these measures will enable us to remain the world leader in flexible workspace.” WeWork had warned the American stock market watchdog (SEC) in early August that it feared for its survival: “There is substantial doubt regarding the company’s ability to continue its activities,” he declared.
The fatal rise of teleworking
The cause, according to the company: financial losses, liquidity needs and the drop in the number of tenants. It explained that it had lost billions of dollars during the first six months of 2023, due to the drop in demand linked to poor economic conditions. The S&P rating agency announced on 1is November lower the group’s rating in the “partial default” category, following WeWork took stock of its problems paying interest on its debt.
Once a start-up star, WeWork has raised billions of dollars from SoftBank Group. But the controversial management of its founder, Adam Neumann, worried investors, who ended up ousting him in 2019. Then the pandemic emptied the offices and the company failed to recover while demand for of professional premises has fallen with the rise of teleworking. The group was valued at up to $47 billion but its stock was worth only 80 cents Monday evening at the close of the New York Stock Exchange, for a market capitalization of $44.49 million.
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