SoftBank Group has prepared a financing package for WeWork Companies that would give it control over the shared office space company, a source said.
The package would significantly increase the stake of SoftBank, which already owns around one third of WeWork, and further dilute the influence of co-founder Adam Neumann.
Reuters earlier reported that SoftBank was in negotiations to make a $1 billion (Dh3.67bn) investment to enable WeWork to go through a major restructure.
Without a fresh infusion of cash, WeWork risks running out of money as early as the end of the December.
WeWork is working with JP Morgan to negotiate a $3bn debt deal after a planned initial public offering was shelved last month because of investor concerns about how it was valued and its business model.
“WeWork has retained a major Wall Street financial institution to arrange a financing,” a WeWork spokeswoman said. “Approximately 60 financing sources have signed confidentiality agreements and are meeting with the company’s management and its bankers over the course of this past week and this coming week.”
WeWork lost $1.9bn in 2018 and burned through $2.36bn in cash in the first half of this year, according to filings.
In recent weeks, Standard & Poor’s and Fitch Ratings have also downgraded WeWork’s credit ratings deeper into junk territory, while the company’s bond is trading at a record low.
WeWork last month replaced co-founder Mr Neumann as chief executive with insiders Artie Minson and Sebastian Gunningham taking on joint chief executive roles.
The pair have talked about the need to return to WeWork’s core business of renting out trendy office space to freelancers and enterprises. That would pull the company back from the fringe activities Mr Neumann had forayed into, such as a school, apartment buildings and various other businesses.
