WeWork, once valued at US$47 billion in 2019, is planning to file for bankruptcy as early as the second week of November 2023, Reuters and Wall Street Journal reported.
This marks a stunning reversal for the New York-based flexible-office-space venture at a time when rising borrowing costs are hurting the commercial real estate sector.
WeWork is considering filing a Chapter 11 petition in New Jersey, people familiar with the matter said on Oct. 31, according to WSJ.
Shares of the flexible workspace provider have fallen roughly 96 per cent in 2023 alone.
The share price fell 32 per cent in extended trading after the WSJ first broke the news.
Japanese conglomerate and investor SoftBank sunk tens of billions into the venture to prop up the startup, but the company has continued to lose money over the years.
WeWork declined to comment when asked for a response by Reuters, which also reported that the company had net long-term debt of US$2.9 billion as of June end and more than US$13 billion in long-term leases.
The company said earlier on Tuesday it had entered into an agreement with creditors for temporary postponement of payments for some of its debt, with the grace period nearing an end.
The company has been in turmoil since its plans to go public in 2019 were met with investors' scepticism over its business model and worries over it taking hefty losses.
WeWork essentially takes long-term leases and rents them for the short term.
Its woes persisted, but still went public in 2021 at a much lower valuation.
WeWork raised "substantial doubt" about its ability to continue operations in August.
Many top executives, including CEO Sandeep Mathrani, departed this year, Reuters reported.
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