July 9, 2019
WeWork Cos plans to raise $3 billion to $4 billion in debt before it goes public, according to a report in Reuters. The fundraising is an effort to shore up investor confidence in the New York-based co-working space provider, following recent disappointing IPO’s by Uber Technolgies Inc and Lyft Inc.
Sources told Reuters that the debt offering could bring in as much as $10 billion over the next few years, and is separate from the IPO funds. The hope is a successful large debt offering would provide sufficient funding to pave a path to profitability, and thus allow WeWork to gain more favorable standing among potential IPO investors.
WeWork reportedly met with investment banks Goldman Sachs and JPMorgan Chase & Co about the potential debt offering, though representatives for the companies declined to comment.
WeWork is still facing uncertainties surrounding the long-term viability of its model that encompasses short-term revenue agreements and long-term loan liabilities.
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