WeWork files for bankruptcy in US
WeWork, the flexible work space provider, has filed for Chapter 11 bankruptcy in the US but will continue to operate as normal in the UK
The company has filed for bankruptcy in the US after it faced mounting losses in a move to strengthen its balance sheet and raise new funding.
The UK operations will continue as normal and are not affected by the move for the time being.
In a statement, the company said: ‘WeWork’s location outside of the US and Canada are not part of this process. WeWork’s franchisees around the world are similarly not affected by these proceedings.’
WeWork has signed a restructuring support agreement with lenders representing approximately 92% of its loan notes to ‘drastically reduce the company’s existing funded debt and expedite the restructuring process’.
During this period the company will review its commercial leases with a view to closing unprofitable sites, but stressed that ‘global operations are continued to continue as usual’.
David Tolley, CEO of WeWork, has been with the business since joining the company’s board in February 2023 and was appointed permanent CEO in October. He said: ‘Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet. We defined a new category of working, and these steps will enable us to remain the global leader in flexible work.’
Tolley has a finance and investment background, and has been CFO of several listed companies, including Intelsat and OneWeb.
WeWork was set up in the UK in 2014, three years after the US business, and has over 400 staff. It operates out of 38 locations in London, with single locations in Birmingham, Cambridge, Edinburgh and four in Manchester.
In the UK, the latest filed accounts for year end December 2021 for the international part of the business, WeWork International Limited, showed that management fees and service revenue was £22.3m, down from £46.6m the previous year with reported operating losses of £153m. Inevitably the covid pandemic had an adverse impact on the business model as lockdowns closed offices. However, occupancy figures in the UK had recovered in 2022.
WeWork was set up in 2010 and is based on a membership model with more than half a million global members, as well as 2,500 staff. At its peak the business was valued at $47bn (£38bn), but based on its latest share price it is worth less than $50m.