WeWork Accepts SoftBank Bailout Plan Valuing WeWork At $8 Bn: Source

New York, (UrduPoint / Pakistan Point News - 22nd Oct, 2019 ) :Japan-based SoftBank will take control of WeWork in a bailout plan that will see the office-sharing startup's co-founder Adam Neumann exit the board, a person close to the matter said Tuesday.

SoftBank, which already holds 29 percent of WeWork, will invest at least $5 billion more, the source said, which will give it control of the company.

About $1.7 billion of the financing package will go to Neumann, who will step down from the board of directors.

The deal slashes the estimated value of WeWork to about $8 billion, a far cry from the $47 billion at the start of the year and a fraction of the sum envisioned in an initial public offering that was abandoned last month.

WeWork, which had also been weighing a bailout plan from JPMorgan Chase, declined comment.

The plan provides needed funds for the troubled office sharing company, which sources have said must raise at least $3 billion to cover its financing needs through the end of the year.

Neumann stepped down as chief executive in September amid questions over perceived self-dealing between his personal assets and WeWork, and over unconventional personal conduct, including drug use.

The deal pays Neumann $1 billion for his SoftBank shares, $500 million for reimbursements of personal debts and $185 million in consulting fees, the source said.

Neumann will maintain a small stake in the company.

The company in late September canceled a plan to go public amid questions over its profitability prospects for the long run, an outcome that some analysts applauded as a commendable weeding-out of overvalued entities in public markets.

SoftBank already about one-third of the company, which last year reported $1.9 billion in losses.