WeWork said it received an early payment of $1.5 billion from SoftBank Group, as the co-working company was weeks away from running out of money.
As a result, a slate of governance changes went into effect Wednesday, including the replacement of co-founder Adam Neumann as chairman and the assignment of five board seats to SoftBank, which will take a majority stake. WeWork also said it appointed a new independent director to the board, Jeff Sine, co-founder of financial firm Raine Group.
“This financing package enables the company to accelerate the path to profitability,” Marcelo Claure, WeWork’s new executive chairman, said in a statement.
The $1.5 billion investment was announced in January and was originally scheduled for April 2020. The deal was accelerated as part of a bailout package for WeWork from SoftBank to rescue the troubled co-working startup after a failed initial public offering.
WeWork’s need for funds was much more dire than initially anticipated based on its IPO prospectus, which became public in August. The filing said that as of June 30 the company had $2.5 billion in cash on hand. But with the startup set to run out of funds in November, that suggested a burn rate of roughly $6 billion a year.
WeWork said it received an early payment of $1.5 billion from SoftBank Group, as the co-working company was weeks away from running out of money.
As a result, a slate of governance changes went into effect Wednesday, including the replacement of co-founder Adam Neumann as chairman and the assignment of five board seats to SoftBank, which will take a majority stake. WeWork also said it appointed a new independent director to the board, Jeff Sine, co-founder of financial firm Raine Group.
“This financing package enables the company to accelerate the path to profitability,” Marcelo Claure, WeWork’s new executive chairman, said in a statement.
The $1.5 billion investment was announced in January and was originally scheduled for April 2020. The deal was accelerated as part of a bailout package for WeWork from SoftBank to rescue the troubled co-working startup after a failed initial public offering.
WeWork’s need for funds was much more dire than initially anticipated based on its IPO prospectus, which became public in August. The filing said that as of June 30 the company had $2.5 billion in cash on hand. But with the startup set to run out of funds in November, that suggested a burn rate of roughly $6 billion a year.
Source: Bloomberg