WeWork India Clarifies Business Will Not Be Impacted By Parent Company's Bankruptcy Concerns
Parent company WeWork warned that additional capital needs to be raised to allow the firm to operate and maintain liquidity in the next year.
WeWork India stated on Wednesday that it’s business will not be impacted after its parent company raised concerns about bankruptcy. WeWork, the New York-based workspace provider earlier informed on Tuesday that the company is facing bankruptcy risks and three of it’s board members have stepped down.
According to a CNBC TV-18 report, WeWork India issued clarity about it’s business stating, “Any development that is emerging globally has no impact on the business here,” and noted that the Indian arm of the company remains fundamentally strong.
The report quoted CEO Karan Virwani assuring the company’s stability. He said, “Since inception, WeWork India has been backed by the Embassy Group who holds the majority stake and control to run and operate WeWork Global’s business in India. Any development globally has no impact on our business here. Despite the challenges brought on by the pandemic, we emerged profitable early last year. We ended FY 2022-23 with a revenue of Rs 1400 crore, and Rs 250 crore in earnings. We have built a strong network of local stakeholders, members, landlords and developers who are increasingly looking to partner with us.”
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On the other hand, things are getting really problematic for the parent company WeWork. The firm warned that additional capital needs to be raised to allow the firm to operate and maintain liquidity in the next year.
The company said, “If we are not successful in improving our liquidity position and the profitability of our operations, we may need to consider all strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the US Bankruptcy Code,” as quoted by CNBC.
The company leases buildings and converts them into office spaces for small companies, individuals, and freelancers, who don’t want to invest in permanent office buildings. The problems have mounted over time due to increasing operational costs and the firm has relied heavily on cash infusions from private investors repeatedly.
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