Results in total funding and capital commitments of over $1.0 billion to support WeWork’s business plan for continued growth
WeWork Inc., the leading global flexible space provider, announced that it has entered into a series of agreements with an ad hoc group representing over 60% of the company’s public bonds, a third-party investor, and SoftBank’s Vision Fund II (“SoftBank”) which will provide the company with an improved and sustainable balance sheet. The ad hoc group includes funds and accounts managed by King Street Capital Management, L.P., funds and accounts managed by BlackRock, funds and accounts managed by Brigade Capital Management, and other leading financial institutions.
Collectively, the transactions announced today will reduce WeWork’s net debt by approximately $1.5 billion at closing, extend a significant maturity wall from 2025 to 2027, and result in new funding and new and rolled capital commitments of over $1.0 billion once completed. Following the completion of the transactions (a summary of which can be found here), the company is expected to be fully capitalized for the business plan filed in conjunction with today’s announcement. Broad support for the comprehensive agreement demonstrates investors’ and stakeholders’ conviction in WeWork’s business plan and growth strategy.
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Transactions Reinforce WeWork’s Market Leading Capabilities and Growth Trajectory
Building on WeWork’s improving financial and operational metrics, the ad hoc group of public bondholders, a third-party investor, and SoftBank have agreed to support a series of transactions, which will result in a more sustainable capital structure:
- Enhanced liquidity: Transactions deliver approximately $540 million in new funding, $175 million in new capital commitments, and $300 million in rolled capital commitments, totaling over $1.0 billion, and net incremental liquidity of over $500 million after cancelation of SoftBank’s prior $500 million senior secured note purchase agreement
- Debt reduction: Cancels approximately $1.5 billion of total debt through the equitization of approximately $1.0 billion of SoftBank unsecured notes, and discounted exchanges of unsecured notes. Pro forma for the transaction, WeWork will have less than $2.0 billion in net debt at closing
- Debt maturity extension: Extends fiscal year 2025 maturity wall by two years; approximately $1.9 billion of pro forma debt will now mature in 2027.
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PJT Partners LP served as exclusive financial advisor, and Kirkland & Ellis LLP served as exclusive legal advisor to WeWork. Houlihan Lokey served as exclusive financial advisor, and Weil, Gotshal & Manges LLP served as exclusive legal advisor to SoftBank. Ducera Partners LLC served as exclusive financial advisor, and Davis Polk & Wardwell LLP served as exclusive legal advisor to the ad hoc group of public bondholders.
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