WeWork bankruptcy: India biz will not be affected, says CEO
BENGALURU: Flexible space provider WeWork, valued at $47 billion in 2019, has filed for bankruptcy.
“WeWork Inc. and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code, and intend to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act (the “CCAA Recognition Proceedings”),” the company said in a statement.
It has also entered into a Restructuring Support Agreement with holders representing approximately 92% of its secured notes to drastically reduce the company’s existing funded debt and expedite the restructuring process. The SoftBank-backed office-sharing company tried to go public but failed five years ago and the pandemic caused further pain as many firms ended their leases.
WeWork said its locations outside the US and Canada are not part of this process and that the company’s franchisees across the world are not affected by these proceedings. In India, WeWork operates independently of WeWork Global. In a statement, Karan Virwani, CEO at WeWork India, said, “Our operations will not be affected. It is a separate entity in itself, and we are not a part of this strategic reorganisation process.
The Chapter 11 filing does not impact the operations of the global entity as it continues to remain in possession of its business, operating as usual.” “The process restructures debts and leases of WeWork Global in the US and Canada. During this period, we will continue to hold rights to use the brand name as part of the operating agreement, while serving our members, landlords, and partners as usual,” he added.