With conditions that clear up a trove of cash for WeWork, the office space and workplace solutions firm has received $1.75 billion in new financing in a drive for fundraising headed up by Goldman Sachs Group, Inc. The new credit line is said to be the first challenge SoftBank cleared in its work to assemble $5 billion debt for a bailout effort, Bloomberg reported on Tuesday (Dec. 17).
“We are pleased that WeWork and SoftBank Group Corp. have entered into a commitment letter with Goldman Sachs.” said WeWork Spokeswoman Clark in an email to the publication. “WeWork and Softbank are co-obligors on a senior-secured and unsecured basis, respectively.” (WeWork won’t have to put forward any cash collateral with the new arrangement.)
The company will have the ability to access the facility beginning in January. The new credit line is said to replace existing facilities that total roughly $1.1 billion. Bonds that WeWork issued in 2018 to aid in the funding for its growth have risen over 10 cents this month to 81.75 cents on the dollar. The report also noted that the company had roughly $575 million in restricted cash at the conclusion of June — most of it was tied to letters of credit per a regulatory filing.
And, in separate news, in November it was announced that WeWork was cutting its worldwide workforce by 20 percent as it aims to reduce costs and revamp is struggling business. The downsizing comes after a failed initial public offering (IPO), major losses, and the resignation of co-founder and CEO Adam Neumann.
At the time, it was noted that the company was expected to lay off 1,000 more employees working for extraneous divisions that will be closed or sold. And about 1,000 maintenance employees were to be outsourced. Maintenance employees were told they would receive similar benefits as well as pay, according to the report.