WeWork secures a new financing of 840 million pounds sterling from SoftBank Group Corp.
The provider of shared workspaces reduces its cash burn rate by almost 50%.
The commercial real estate company closes the second quarter with £3.13 billion in cash.
WeWork said on Thursday that it has successfully reduced its cash burn rate by almost 50% compared to the start of the year. It also announced that it has secured £840 million in additional funding from SoftBank Group Corp (TYO:9984), which currently holds a majority stake in WeWork. Previously, in April, SoftBank had withdrawn from a £2.41 billion takeover bid that had led WeWork into crisis.
SoftBank’s shares lost around 1.5% on Friday. The Japanese conglomerate closed the regular meeting at 45.34 pounds per share compared to its previous annual low of 19.26 pounds per share in March, when the impact of COVID-19 was at its peak. Do you find it difficult to choose an online stockbroker for trading? Here are some of the most important ones to choose from.
WeWork closed the second quarter with £3.13 billion in cash.
In an email to WeWork employees, the company acknowledged the impact of the ongoing coronavirus pandemic on its second quarter results, but was confident that its robust financial position was sufficient to combat the economic blow. SoftBank also released its financial results earlier this week, which showed a net profit of £9.00 billion for the first quarter.
At £673.23 million, WeWork’s revenues in the second quarter of the fiscal year were 9% lower than in the same quarter last year. However, in the previous quarter, the shared workspace provider had recorded even higher revenues of £840 million. Its cash burn rate at the end of the first quarter was £267.91 million.
The U.S. commercial real estate company boasted that it closed the second quarter with £3.13 billion in cash. This figure includes the new £840 million financing from SoftBank and other unfunded cash obligations.
At the beginning of July this year, WeWork said that it hoped to make cash flow positive next year.
WeWork had 612 thousand members at the end of the second quarter.
According to the New York-based company, it had a total of 612,000 members at the end of the second quarter, compared to a higher 693,000 at the end of the first quarter. 48% of its members came from companies with more than 500 employees.
WeWork planned its IPO last year with an Initial Public Offering (IPO) in August, which valued the company at £25.88 billion. However, following complaints of mismanagement, the company withdrew its application for an IPO in September 2019. The litigation led to a massive management restructuring and weighed heavily on the company’s performance over the past 12 months.