WeWork Is in Talks to Raise Hundreds of Millions in Cash

Ellen Huet, Bloomberg News

Signage is displayed at the WeWork Cos. 32nd Milestone co-working space in Gurugram, India, on Monday, Feb. 18, 2019. The New York-based co-working giant WeWork Cos, which operates shared office spaces around the world, has attracted huge piles of investor money, which it uses to snap up office space in the largest cities on earth. , Bloomberg

(Bloomberg) -- WeWork Inc., the long-struggling workspace rental company, is in talks to raise hundreds of millions in capital to support the business, said a person familiar with the negotiations.

Yardi Systems Inc., a real estate software maker in Santa Barbara, California, is weighing an investment, said the person, who asked not to be identified because the talks are private. WeWork and Yardi have been working together on projects for at least the last year.

The proposed deal, if it goes through, would allow WeWork to restructure its debt and would provide a financial cushion of several years, said the person familiar with the negotiations. SoftBank Group Corp., the largest outside investor, doesn’t plan to contribute to the financing but is open to revising terms on WeWork’s loans, the person said.

Representatives for WeWork and SoftBank declined to comment. Yardi didn’t immediately respond to requests for comment.

WeWork shares rose about 5% in extended trading. The potential investment was reported earlier Tuesday by the New York Times.

Once one of the most valuable startups in America, WeWork has limped along for the past few years. A near collapse in 2019 resulted in the ouster of its star founder, Adam Neumann, and a multi-billion-dollar bailout from SoftBank. The Covid-19 pandemic, which forced many office buildings closed, inflicted further damage.

WeWork’s stock is down about 76% over the least year. Neumann is no longer involved in management of the company and now runs a residential real estate startup.

--With assistance from Sarah McBride.