Co-working space provider WeWork filed for bankruptcy in the US and began a comprehensive reorganisation and restructuring process to curb debt and strengthen its balance sheet. The company, listed on the US-based NYSE, said that this bankruptcy will not affect its businesses such as WeWork India, which are located outside the US and Canada.
The US-based firm issued a statement and said that the company and some of its entities have applied for protection under Chapter 11 of the US Bankruptcy Code, and further plan to file recognition proceedings in Canada under Part IV of the Companies Creditors Arrangement Act (the CCAA Recognition Proceedings).
WeWork India Issues Clarification
For further clarification, WeWork India issued a statement on Tuesday affirming that the India unit is separate from its US counterpart and will not be impacted by the bankruptcy in any way. The statement, released on social media platform X, said, “WeWork India is a separate entity from WeWork Global. The recent Chapter 11 filing will not impact our members and stakeholders in India. We will continue to operate and serve our members, landlords, and partners as usual. Committed to the growth and success of our business.”
WeWork India is a separate entity from WeWork Global. The recent Chapter 11 filing will not impact our members and stakeholders in India. We will continue to operate and serve our members, landlords, and partners as usual. Committed to the growth and success of our business. pic.twitter.com/92KeXB1X4I
— WeWork India (@WeWorkIndia) November 7, 2023
WeWork India is owned by the Bengaluru-based realty firm Embassy Group and has 50 centres spread across the country. The Embassy Group controls 73 per cent stake in the company, while WeWork Global owns a 27 per cent shareholding. Earlier in June 2021, WeWork Global invested $100 million in WeWork India, reported PTI.
Notably, Softbank-supported WeWork Inc. was once valued at $47 billion and posted a net loss of $696 million in the first half of the year. The company added in its statement, “WeWork’s franchisees around the world are similarly not affected by these proceedings.” The firm revealed that it has also initiated a detailed procedure for reorganisation to strengthen its capital structure and financial performance to help the firm perform better going ahead. The company noted that it holds strong support of its major financial stakeholders and has ventured into a Restructuring Support Agreement (RSA) with the stakeholders representing about 92 per cent of the secured notes to massively curb the firm’s existing debt and quicken the restructuring process.
David Tolley, CEO of WeWork, said, “Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet.” The company’s consolidated real estate portfolio included 610 locations spread across 33 nations, which provided support to nearly 715,000 workstations and 512,000 physical memberships, as of June 30, 2023.
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