Sources say shared office giant WeWork has reached a 'life-and-death crisis' and is seeking to restructure to avoid bankruptcy

News from this website on August 24, according to Reuters, WeWork has hired restructuring consultants to seek to avoid bankruptcy and reorganization. WeWork had already issued a warning two weeks ago, facing continued losses and office space members continuing to cancel leases. It has "serious doubts" about whether it can continue to operate. WeWork, which is now "at a critical moment of life and death," is trying to avoid bankruptcy through restructuring.

According to Reuters, WeWork has hired real estate consulting firm Hilco Global and again hired corporate management services consulting firm Alvarez & Marsal and law firm Kirkland & Ellis to provide advice on the restructuring. Suggestions on matters such as

It is reported that WeWork seeks to avoid applying to the court for bankruptcy reorganization based on Chapter 11 of the Bankruptcy Law (Chapter 11), hoping to reorganize debts out of court without resorting to the court. WeWork's ability to avoid bankruptcy depends largely on its ability to terminate or renegotiate a slew of leases in high-rent markets.

After inquiries, this site learned that

This is the second time that WeWork has reported that it will be reorganized. In early August, WeWork added four directors to the board of directors, all of whom are "reorganization experts." expert".

However, Reuters claimed that a WeWork representative issued a statement saying that the company will continue to invest in its products and take necessary measures to reduce rent and leasing costs. WeWork will still put members first, regardless of what may be done in the near future. Regardless of the action, the company will continue to operate in the long term and provide services to members.

Financial report shows that WeWork’s revenue in the second quarter of this year increased by 4% year-on-year to US$844 million (note on this site: currently approximately 6.144 billion yuan), slightly lower than market expectations of US$851 million (currently approximately 6.195 billion yuan) RMB); net loss was US$397 million (currently approximately RMB 2.89 billion), a year-on-year decrease of US$238 million (currently approximately RMB 1.733 billion); adjusted loss before interest and tax was US$36 million (currently approximately RMB 262 million) ), while the market expected adjusted earnings before interest and taxes of US$26.8 million (currently approximately RMB 195 million).

In the financial report, WeWork stated that

the company is currently facing continued losses and office space members continue to cancel their leases. The company's ability to continue as a going concern mainly depends on "the effectiveness of cutting lease costs, controlling expenses and limiting capital expenditures, increasing revenue levels and raising capital over the next 12 months".

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