WeWork, whose losses greater than doubled to $1.25 billion as of the third quarter of 2019, instructed bond traders in a letter reviewed by Reuters that it was in a sound monetary place to execute its beforehand introduced plan by means of 2024.
WeWork mentioned it had $1.three billion in money at 12 months finish, $800 million of money that turned unrestricted when it closed on a brand new letter of credit score facility in February and $2.2 billion senior unsecured debt funding from main shareholder SoftBank Group.
It mentioned it has one other $100 million of remaining capital commitments from SoftBank. WeWork didn’t point out the scale of its losses by year-end.
WeWork additionally mentioned it’s unlikely to meet targets it had beforehand set for this 12 months. It didn’t present data on its full-year 2019 outcomes, which it’s going to launch to bond holders after markets shut at four p.m. on Thursday.
The corporate expanded its community of shared workspace to 739 places in 37 nations by 12 months finish. WeWork signifies on its website that it’s now open or quickly shall be in 847 places worldwide in 118 cities.
WeWork faces a tricky enterprise setting as its prices rise because of the coronavirus outbreak. The yield on its junk bonds has virtually tripled to 34.eight% prior to now month as markets plunged on pandemic-induced recession fears.
S&P World’s credit standing unit on Monday lower WeWork’s 7.875% bond additional into junk territory and put the corporate on look ahead to presumably one other downgrade over considerations about SoftBank’s dedication to WeWork.
The pandemic’s disruption and a rush to distant working may weigh closely on WeWork by lowering occupancy, growing working prices and pressuring the corporate’s means to fill positions, S&P World mentioned.
WeWork’s means to totally entry the remaining $three.three billion in debt funding and a profitable completion of SoftBank’s $three billion tender supply to different shareholders additionally bear watching, it mentioned.
The particular committee of WeWork’s board indicated earlier this week that it’s going to oppose any effort by SoftBank to forego or alter its deliberate tender supply. SoftBank mentioned it knowledgeable shareholders that not all situations of the supply have been met.