WeWork's future in jeopardy as company faces 'substantial doubts'
Workspace provider WeWork has raised "substantial doubts" about its ability to continue as a going concern, warning of a possible bankruptcy. The company's management stated that additional capital is needed to maintain liquidity over the next year. It has struggled to deal with the tech sector's troubles despite restructuring debt and operations, including cutting its debt by $1.5 billion in March.
WeWork is working on improving liquidity and profitability
In the second quarter, WeWork reported a net loss of $397 million. It believes its ability to keep operating will depend on the successful execution of liquidity and profitability improvement plan. The plan includes restructuring or refinancing its debt, seeking more debt or equity capital, reducing or delaying business activities and strategic initiatives, selling assets, or obtaining relief under the US Bankruptcy Code.
Pandemic woes and executive exodus plague WeWork
The pandemic has significantly impacted WeWork's operations, making it difficult for the company to turn a profit since going public. The resignations of CEO Sandeep Mathrani and CFO Andre Fernandez this year have further compounded WeWork's troubles. WeWork is currently searching for a permanent CEO and has added four board members after three members stepped down.
