WeWork appoints advisers to stave off US bankruptcy

The office space provider's shares have plunged 97% in the last year and its debt has fallen into deep distress

WeWork will attempt to renegotiate property leases.

Office space provider WeWork is rounding up advisers for help with a restructuring as it struggles with a heavy debt load and poor financial performance.

The co-working giant has hired property adviser Hilco, has once again tapped consultant Alvarez and Marsal, and has re-engaged law firm Kirkland and Ellis for advice on its options. The company is seeking to avoid a Chapter 11 bankruptcy filing in the US and restructure its debts out of court. 

WeWork’s ability to stave off a US bankruptcy filing will depend in large part on whether it can terminate or renegotiate a substantial number of its property leases in more expensive markets.

“We will continue to invest in our product offerings while simultaneously taking necessary steps to reduce rent and tenancy costs. Our members remain our priority and, regardless of any near term actions we may take, we will continue to operate and serve them for the long term,” a representative for WeWork said in a statement.

'Substantial doubt'

WeWork earlier this month told investors there is “substantial doubt” about its ability to stay in business. The company will focus over the next year on cutting rental costs, negotiating more favorable leases, boosting revenue, and raising money, it said in a statement at the time.

The company went public through a combination with a special-purpose acquisition company in 2021. Its shares have plunged 97% in the last year, and its debt has fallen into deep distress, just months after it reached a sweeping debt-cutting deal with some of its creditors.

• Bloomberg