(New York) The American shared office specialist WeWork announced on Tuesday that it had managed to renegotiate dozens of commercial leases and have terminated others, a step considered a turning point towards the sustainability of the company.
Between renegotiations and lease exits, WeWork claims to have reduced its future rent commitments by more than 40%, which represents a saving of more than $8 billion, according to a press release published Tuesday.
The company announced at the beginning of September that it had started discussions with a view to modifying the conditions of “virtually all” of its leases, recognizing that there was “substantial doubt about [sa] ability […] to continue its activities.
But this did not allow WeWork to avoid filing for bankruptcy at the beginning of November.
“With this major reduction in future rental expenses and improved operational efficiency, WeWork is positioned to achieve strong and sustainable financial performance,” the company said.
Furthermore, as part of its restructuring, WeWork says it has managed to reduce its debt by more than $3 billion after validation of a restructuring plan by the majority of its bond creditors.
“We are well advanced on the path to a strong and sustainable WeWork,” commented CEO David Tolley, quoted in the press release.
“We remain committed to completing this restructuring later this quarter,” added the executive, who specified that at the end of this process, WeWork would have “little or no debt”.
The group says it manages around 1.8 million m2 offices in more than twenty countries.
After displaying insolent growth for years, WeWork saw its model disrupted by the COVID-19 pandemic, which established the emergence of teleworking.
The episode added to the fears of investors, who were already worried about the lack of profitability of the start-up as well as the mistakes of the boss and co-founder, Adam Neumann, who arrived in 2019.
Adam Neumann recently made headlines again by submitting an offer to purchase WeWork, to the tune of $500 million.
At its peak in early 2019, the group was valued at up to $47 billion.