SoftBank confirms multibillion-dollar bailout for WeWork
Tokyo, Oct 23 (AFP/APP): Japan-based SoftBank Group confirmed Wednesday it will pump billions of dollars into struggling start-up We Work, in a deal that ups its stake in the office-sharing firm to around 80 percent.
The package, which involves new financing, speeding up already pledged money and a new tender offer for existing shareholders, is worth a total of $9.5 billion.
It will see co-founder Adam Neumann, who has already been forced to step down as chief executive, exit the board for an “observer” role.
SoftBank Group’s Marcelo Claure will take over as executive chairman of the board.
The agreement caps a turbulent period for the once-vaunted start-up, which was valued by some at around $47 billion at the start of the year, and represents a significant shot in the arm as the company haemorrhages money.
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“SoftBank has decided to double down on the company by providing a significant capital infusion and operational support,” SoftBank Chairman Masayoshi Son said in a statement.
“The new capital SoftBank is providing will restore momentum to the company and I am committed to delivering profitability and positive free cash flow,” added Claure in the statement.
The package includes $5 billion in new financing, as well as a commitment to speed up an existing pledge of $1.5 billion.
SoftBank will also launch a tender offer of up to $3 billion for existing shareholders, at a price of $19.19 a share, expected to start in the fourth quarter of 2019.
SoftBank bailout would give it control of WeWork: sources
