(Reuters) – SoftBank Group Corp plans to pump in an extra $1 billion or more at WeWork due to the renegotiation of the warrant agreement shall be made for the falling ratings, the slowing of the US office is part of the launch of the IPO, the Financial Times reported.
FILE PHOTO:A woman leaves a WeWork co-working space in New York City, New York, New York, USA on January 8, 2019. REUTERS/Brendan McDermid
The plan would be an increase in the Japanese company, which initially will be an investment of $1.5 billion at WeWork, as part of the agreement, the US company shall have the right to receive the money in April of the next year, in exchange for Class A common stock.
They turned, and the China-backed Vision Fund, WeWork, the largest financial backers and has already channeled more than $10 billion in the U.S. company, including a promised $1.5 billion.
The potential for new investment from SoftBank was able to unlock more financial opportunities for WeWork, which has been in discussion for over $3 billion to $4 billion loan from a syndicate of banks, subject to the raising of additional capital, the FT added.
A new deal is a drop in the share price at which SoftBank will acquire WeWork in stock, so it is a higher involvement in the non-profit making, property group, the FT said on Wednesday, according to people briefed on the matter. It was unclear as to how the negotiations would affect the Japanese group, and the valuation of the investment, the FT said.
WeWork declined to comment on the report. SoftBank does not immediately respond to a request for comment.
SoftBank has invested in the WeWork the older We get, our Company, in a $47 billion valuation in October, however, investor skepticism has led to a potential initial public OFFERING valuation is as low as $10 billion early this month, Reuters reported.
The startup postponed its IPO last week, and on Tuesday, the co-founder, Adam Neumann, handed in his resignation as chief executive officer, of which the majority of voting control of the company following SoftBank and other shareholders turned against him.
WeWork was appointed two insiders as its co-Ceo’s, and said Construction will continue on the board as non-executive chairman.
We are a Company said it was evaluating the “best timing” for an initial public OFFERING.
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In the run-up to the planned IPO of the company, the investors questioned in WeWork’s corporate governance standards, as well as the sustainability of its business model, which is based on a combination of long-term debt and the yield on a short-term basis.
The low rating is a blow for SoftBank, as it is trying to collect $108 billion in the second Vision of this Fund. Reuters ‘ sources have said that it is likely that SoftBank would make the pony more money for the support of its biggest bet, or an impairment that, in the event of an IPO of the company.
SoftBank’s stock is down 8% since the beginning of this month.
The renegotiation of the warrant agreement is one of several options being considered, FT is said to be.
The talks are at an early stage, and SoftBank, led by billionaire Masayoshi Son, would be able to decide to invest in this, the business daily said.
Report by Mekhla Raina, and Mary Ponnezhath in Bengaluru; Writing by Sayantani Ghosh; Editing by Himani sarkar and Stephen Coates