What’s going on:
On Friday, WeWork announced it had negotiated agreements to decrease its debt by approximately $1.5 billion, as well as postpone some maturity dates in an effort to keep cash. To prepare for the potential impact of a likely economic recession, the company is also bringing in about $540 million in fresh funds.
Why it matters:
Last month, the company predicted a slump in revenue for the present quarter, having already declared its intention to slash 300 positions and shut down 40 struggling American establishments in an effort to reduce its real estate presence.
On Friday, SoftBank Group’s $1 billion unsecured notes were converted to equity; the Japanese company held a pre-restructuring stake of 46% in WeWork, according to Refinitiv data.
How it’ll impact the future:
WeWork said that the newly-matured pro-forma debt will amount to $1.9 billion by 2027, and upon the completion of the deal, its net debt will fall below $2 billion.
After struggling for two years to make it public, WeWork has yet to post a quarterly profit; however, they recently announced that they expect to see a core profit this year, thanks to their cost-cutting efforts.