Adam Neumann would be left with less than 10% of the shares and voting rights at WeWork, according to three people briefed on the plan. Marcelo Claure, SoftBank’s Chief Operating Officer, would become Chairman.
SoftBank will emerge with between 60% and 80% of WeWork’s equity under the package, which involves $5 billion of new debt, injecting $1.5 billion in equity and an offer to buy up to $3 billion of existing shares.
Neumann’s reduced status under the emergency refinancing caps the striking fall of a self-described visionary who two months ago was hoping to take his company public in one of the hottest stock market debuts of the year. Having previously expected his family to take charge of WeWork far into the future, Neumann will now see his company under the control of SoftBank, the Japanese technology and telecom group founded by Masayoshi Son.
WeWork’s equity valuation will be slashed to roughly $8 billion if the board agrees to the rescue by SoftBank, which had pumped the office space provider’s valuation up to $47 billion with more than $10 billion of earlier investments and funding commitments.
WeWork’s failed initial public offering and a rapidly depleting cash pile have forced it to consider rival rescue packages from SoftBank and JPMorgan Chase, the bank that led its attempt to go public.
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