WeWork Needs to Raise $400M as Adam Neumann Looms

WeWork is seeking to raise cash in its bid to exit bankruptcy as the specter of co-founder Adam Neumann looms large.

For WeWork to emerge from bankruptcy as a viable company, it needs as much as $400 million in fresh funding, sources told the Financial Times. The co-working company has been trying to restructure since November, when it declared bankruptcy.

Existing lenders for the company, including SoftBank and Yardi Systems, are in discussions about providing the financing.

WeWork needs the funding, despite renegotiating hundreds of leases. If it fails to obtain the financing, it may be forced to sell itself.

Neumann, who left WeWork in 2019 after a failed bid to take the company public, has submitted a conditional offer of roughly $600 million to buy his old company; Neumann is the face of Flow, an apartment startup backed by venture capital firm Andreessen Horowitz.

Alex Spiro, an attorney for Flow, said the company and its partners — which reportedly include Rithm Capital and the real estate arm of Len Blavatnik’s Access Industries — are ready to beat any other offer for WeWork by 10 percent. He added that it would take two weeks to perform due diligence on an acquisition.

WeWork plans to emerge from bankruptcy by the end of next month. In a statement, the company said, “Any new financial investment would serve to further strengthen the company as we exit from bankruptcy.”

WeWork’s path out of its bankruptcy maze came into focus at the beginning of the month, when the company revealed that it had charted a course for 90 percent of its global locations. Approximately 150 of its leases are sticking with agreed-to terms, while 150 are being amended and 150 are being rejected.

The company anticipates saving more than $8 billion, a reduction of more than 40 percent in future rent commitments.

— Holden Walter-Warner