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WeWork says it has enough money to survive the coronavirus pandemic

WeWork says it has enough money to survive the coronavirus pandemic
Written by Noah

Shared office operator WeWork told investors on Thursday that $ 4.4 billion in cash and cash commitments it had at the end of 2019 will be enough to implement its five-year plan and address the challenges of the coronavirus crisis.

WeWork, whose losses more than doubled to $ 1.25 billion from the third quarter of 2019, told bond investors in a letter reviewed by Reuters that it was in a sound financial position to implement its previously announced plan by 2024.

WeWork said it had $ 1.3 billion in cash at year-end, $ 800 million unlimited when closed on a new credit facility in February, and $ 2.2 billion in high unsecured debt financing from major shareholders of SoftBank.

It said it has another $ 100 million in remaining capital commitments from SoftBank. WeWork did not specify the size of its losses at year-end.

WeWork also said it is unlikely to meet the targets it had previously set for this year. It did not provide information on its full-year results for 2019, which it will release to bondholders after markets closed on Thursday.

The company expanded its network of shared workspaces to 739 locations in 37 countries at the end of the year. WeWork states on its website that it is now open or will soon be in 847 locations worldwide in 118 cities.

WeWork faces a tough business environment as costs increase due to the coronavirus outbreak. The return on its rubbish bonds has almost tripled to 34.8 percent over the past month as markets plunged into pandemic-induced recession.

On Monday, S&P Global’s credit rating unit lowered the WeWork bond by 7,875 percent further to the debris territory, and put the company on guard for possible further downgrading of concerns over SoftBank’s commitment to WeWork.

The disruption of the pandemic and rush to the remote work can weigh heavily on WeWork by reducing occupancy, increasing operating costs and squeezing the company’s ability to fill services, S&P Global said.

WeWork’s ability to fully access the remaining $ 3.3 billion in debt financing and a successful implementation of SoftBank’s $ 3 billion offer to other shareholders also agree, it says.

Earlier this week, the WeWork Board’s special committee indicated that it will oppose all efforts by SoftBank to change its planned tender offer.

SoftBank said that it informed the shareholders that not all the conditions for the offer have been met.

Source–> https://nypost.com/2020/03/26/wework-says-it-has-enough-cash-to-survive-coronavirus-pandemic/

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