The office space provider WeWork has been rescued by its major shareholder Softbank after the ruptured IPO. The Japanese technology investor is pumping another $ 9.5 billion on new loans and buying shares in the loss-making company.
Softbank will hold 80 percent of WeWork as soon as the various financial transactions such as new loans over five billion euros and the share purchase of existing shareholders such as the recently retired from the chief executive Adam Neumann. This was reported by WeWork and Softbank in New York and Tokyo.
Softbank and its Saudi-backed funds Vision Funds have already invested $ 9 billion in WeWork, holding 29 percent of the company's IPO records. Under the new cash injection from Japan, WeWork is valued at only $ 8 billion, down to just a fraction of what the company was worth at the beginning of the year. According to the US media, the company, which was founded in 2010, was one of the most valuable start-ups in the world with a valuation of 47 billion dollars in January. But this high valuation could not be realized through an IPO.
That's why Neumann's ambitious stock market plans failed miserably in September. In addition, the operating business is still deep in the red, already at the end of the year, the coffers without the new money from Japan would probably have been empty.
Von Neumann softbank says goodbye with a golden handshake. According to information from the news agency Bloomberg he may sell shares in the course of the deal for up to one billion dollars to Softbank, also gets a million-dollar loan and advisory fees in the three-digit millions.
Some of the Softbank shareholders took the decline of WeWorks as an opportunity to exit. The company's course, which also includes Wirecard, lost more than three percent to 4164 yen after announcing the new billion-dollar injection. The share thus built up its losses in recent months. In April, the paper had cost nearly 6,000 yen.