A sign marks the location of a WeWork office facility on August 14, 2019 in Chicago, Illinois.
Scott Olson | Getty Images News | Getty Images
Without the Softbank bailout deal, reeling space-sharing company WeWork would have been out of money by next Friday, sources tell CNBC’s David Faber.
WeWork announced Tuesday that Japanese conglomerate SoftBank will provide $5 billion in new financing and up to $3 billion in a tender offer for existing shareholders. SoftBank will also speed up an existing $1.5 billion financing commitment.
After closing, and following the tender offer, SoftBank’s fully diluted economic ownership of WeWork will be approximately 80%.
WeWork also said it will appoint SoftBank Chief Operating Officer Marcelo Claure as its executive chairman while former WeWork CEO Adam Neumann will become a “board observer” as the company expands the panel of directors and receives voting control over his shares, the company said.
Revelations that WeWork was about one week from running out of cash comes on the heels of a slew of bad news for the company since it released its IPO prospectus in August. Its government filing revealed a massive $900 million loss in the first six months of 2019.
CNBC’s David Faber first reported on Monday that SoftBank would bail out WeWork’s parent company, The We Co.