WeWork Bankrupt, Previously Valuation IDR 720 T Now Files for Bankruptcy Tech – 12 hours ago

Jakarta, CNBC Indonesia – WeWork will file for bankruptcy as early as the second week of November 2023. The US co-working startup is in debt and experiencing large losses.

Reported Reuter, s a number of people familiar with the matter say WeWork is considering filing a Chapter 11 petition in New Jersey.

Earlier on Tuesday (31/10), WeWork signed an agreement with creditors to temporarily postpone payments on some of its debts, with the grace period almost over.

The company had long-term net debt of US$2.9 billion at the end of June and long-term leases of more than US$13 billion. WeWork owns this amount amidst rising banking loan costs which are hurting the commercial real estate sector in the United States.

The news of the bankruptcy filing is not surprising. The company, which had a valuation of around US$ 47 billion (Rp. 720 trillion) in 2019, has been struggling to survive for a long time.

The company is known to have started to shake out since its plans to go public in 2019 failed, following investor skepticism about its business model of taking long-term leases and renting them out for short terms and concerns about large losses.

The problems did not end, WeWork’s situation did not improve in the following years.

However, they finally managed to get listed on the stock market in 2021 at a much lower valuation. Its main investor, Japanese conglomerate SoftBank, spent tens of billions of dollars to prop up the startup, but the company continues to lose money.

WeWork raised major doubts about its ability to continue operations in August, with many executives, including CEO Sandeep Mathrani, resigning this year.

Last September, the world’s largest former unicorn startup had difficulty paying office rent.

At that time, WeWork CEO David Tolley was confident that WeWork would not go bankrupt. Tolley is believed to be interim CEO in May 2023. His main strategy is to negotiate WeWork office space around the world.

[Gambas:Video CNBC]