Softbank taps Goldman for Wework debt financing plan
Wework saviour Softbank has approached Goldman Sachs for financing as it attempts to reinvigorate the flexible working space provider.
The banking giant is securing a $1.8bn (£1.4bn) line of credit, the first stage in Softbank’s $5bn debt financing package for Wework.
Read more: Wework names four new executives and outlines six point plan for profitability by 2023
According to Bloomberg, which broke the story, Softbank will be listed as the borrower and Wework as the co-borrower in an attempt to make the plan more acceptable to other lenders.
After the initial credit line is in place an additional package of $3.3bn will be arranged to finish the financing plan.
The facility will replace existing arrangements totalling around $1.1bn.
Wework declined to comment. City PM has contacted Softbank and Goldman Sachs for comment.
In October Japan’s Softbank provided Wework with a $9.5bn rescue package, which saw it take over roughly 80 per cent of the firm’s shares.
Wework has suffered a high-profile fall from grace since its $47bn valuation in January.
The company was forced to scrap plans for an initial public offering in September when investors baulked at its growing losses, business model and corporate governance, leading to the resignation of co-founder Adam Neumann as chief executive.
Last month Wework confirmed it will lay off roughly 2,400 employees around the world as the company launches a drastic bid to cut costs and shore up its business.
Read more: Wework lays off 2400 employees in Softbank-led efficiency drive
A spokesperson for the business said the cuts were part of the company’s efforts to focus on its core business and “create a more efficient organisation”.
In a further blow, Mitsubishi UFJ Financial Group (MUFG), Japan’s largest bank, is said to be likely to withhold additional loans from Softbank.