WeWork Raises Going-Concern Doubt Amid Losses, Cash Crunch

WeWork says a substantial doubt exists about the workspace provider’s ability to continue as a going concern amid its losses and projected cash needs
WeWork Raises Going-Concern Doubt Amid Losses, Cash Crunch
Source: WeWork

Workspace provider WeWork Inc. said a substantial doubt exists about the company’s ability to continue as a going concern amid its losses and projected cash needs, as well as increased member churn and current liquidity levels.

The NYSE-listed company’s ability to continue as a going concern is contingent upon successful execution of management’s plan to improve liquidity and profitability over the next 12 months, WeWork said in a statement.

These plans include reducing rent and tenancy costs via restructuring actions and negotiation of more favorable lease terms, increasing revenue by reducing member churn and increasing new sales, controlling expenses and limiting capital expenditures and seeking additional capital via issuance of debt or equity securities or asset sales, it added.

WeWork was founded in 2010 with the vision to create environments where people and companies come together and do their best work.

As of 30 June 2023, WeWork’s systemwide real estate portfolio consisted of 777 locations across 39 countries, supporting about 906,000 workstations and 653,000 physical memberships.

Board Reshuffle

Separately, WeWork said Daniel Hurwitz, Vivek Ranadive and Veronique Laury have stepped down from the board.

The company said it appointed PSA Consulting Founder Paul Aronzon; Paul Keglevic, former chief executive officer of Energy Future Holdings; Elizabeth LaPuma, former managing director and head of balance sheet advisory at UBS; and Henry Miller, a co-founder and retired partner of Marblegate Asset Management LLC, to the board with immediate effect.

“The deep financial expertise and robust business experience that each of our new directors bring to the table will add immense value as we double down on sustainably reducing costs, continuing to grow memberships and revenue, and strengthening our balance sheet,” WeWork Interim CEO David Tolley said.

The company said its board is continuing its search for additional independent directors as well as a permanent CEO.

India Immune

WeWork India, which is backed by the Embassy Group, said there won’t be any impact on the Indian business due to the global development, according to CNBC-TV18.

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