Active Stocks
Thu Feb 29 2024 15:49:54
  1. Kotak Mahindra Bank share price
  2. 1,690.80 0.43%
  1. Axis Bank share price
  2. 1,075.70 0.10%
  1. Tata Steel share price
  2. 140.90 0.11%
  1. Power Grid Corporation Of India share price
  2. 282.55 1.07%
  1. ITC share price
  2. 406.50 -0.51%
Business News/ News / World/  WeWork gets new $1.1-bn commitment from SoftBank, cuts burn rate
BackBack

WeWork gets new $1.1-bn commitment from SoftBank, cuts burn rate

The company said in an e-mail to employees that its second-quarter results show the coronavirus pandemic has hurt business but its financial position remains strong

(Photo: Reuters)Premium
(Photo: Reuters)

New York: The owner of money-losing shared office provider WeWork told employees on Thursday it has slashed its cash burn rate almost in half from the end of last year and obtained a $1.1 billion commitment in new financing from majority owner SoftBank Group Corp.

The company said in an e-mail to employees that its second-quarter results show the coronavirus pandemic has hurt business but its financial position remains strong.

"Our early efforts to become a more streamlined, cash-conscious organization puts us in a better position to adapt quickly, navigate new realities and deliver our future business objectives," said Kimberly Ross, chief financial officer of WeWork, in the e-mail seen by Reuters.

Revenue in the quarter reached $882 million, a 9% increase from a year earlier, Ross said. WeWork in the first quarter reported revenue of $1.1 billion, the first time it had exceeded nine figures, and its cash burn was $482 million.

WeWork has $4.1 billion in cash and unfunded cash commitments, including the $1.1 billion in new financing, Ross said. WeWork in July indicated it expected to be cash flow positive in 2021, according to the Financial Times.

The $1.1 billion is the last of the debt facilities included in a wide-ranging transaction announced in October 2019, a source at SoftBank said.

WeWork ended the quarter with 612,000 members, a decline from 693,000 in the prior quarter. But 48% were from prized "Enterprise" customers, businesses with 500 employees or more.

The results were released almost a year to the day after it filed plans to go public, when the company was valued at $47 billion and looked poised to be one of the year's hottest IPOs.

WeWork soon entered a tailspin as revelations of corporate mismanagement emerged. The company has since undergone an enormous management shake-up and remains enmeshed in lawsuits over a $3 billion tender offer to existing shareholders.


Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Check all the latest action on Budget 2024 here. Download The Mint News App to get Daily Market Updates.
More Less
Published: 14 Aug 2020, 02:23 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App