WeWork Skips $95M In Interest Payments

WeWork isn't making interest payments totaling about $95M, the company said Monday, as it negotiates with its landlords and creditors in an effort to shore up its precarious financial condition.

The company has a 30-day grace period in which to make the payments, and it also asserts it has enough cash on hand to do so — $205M, plus a $475M credit line, The New York Times reports.

Withholding payments is a strategy sometimes employed by corporate debtors in the process of renegotiating terms. WeWork interim CEO David Tolley told the NYT that the move was typical and a “precursor to a conversation.”

WeWork didn't immediately respond to a request for comment Tuesday. The company's stock was down about 20% in midday trading.

In September, WeWork said it was beginning to renegotiate almost all of its leases and intended to leave “unfit and underperforming locations.” Lease liabilities accounted for over two-thirds of the company's total operating expenses in the second quarter.

Even so, WeWork said it is going to stay in the majority of its buildings and markets.

The coworking company has already left some spaces. Its departure from a Manhattan location in late 2022 inspired a September lawsuit from the landlord, demanding full payment of $30M in lost rent.

WeWork suffered a net loss of $397M in Q2, a deeper hit than its $299M in Q1 but an improvement from Q2 2022, when it reported a net loss of $635M.

WeWork said in a quarterly earnings release in August that it had “substantial doubt” about its ability to stay in business.

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Related Topics: WeWork , WeWork debt
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