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Companies

WeWork aims for sooner-than-expected IPO in September

Office space group in talks with banks over financing package before listing

  © Reuters

NEW YORK (Financial Times) -- WeWork is aiming to publicly list its shares as early as September while stock markets remain buoyant, as the loss-making provider of shared office space races to sew up a multibillion-dollar debt facility in the next few weeks, according to three people with knowledge of the matter.

The $47bn group, which filed paperwork for an initial public offering confidentially with US securities regulators late last year, could make those plans public as early as next month, the people added.

The company is meeting with Wall Street banks this week as it works to clinch a new financing package before its hotly anticipated IPO.

That fundraising could add more than $5bn to WeWork's cash pile, one person added, which would go to buttress the company's balance sheet and reduce the amount of capital it would need to raise in its listing.

The group is structuring the cash infusion as an asset-backed loan supported by the rent it generates from a number of its properties. Banks have been lining up to help organise the fundraising and its size has already swelled.

It is now attempting to raise at least $1bn more than it had earlier sought through the borrowing.

The timing of the IPO, which was earlier reported by The Wall Street Journal, could nonetheless slip. Many investors and advisers had expected the company to wait until later this autumn or early 2020 to complete its flotation, when it will join a handful of other highly valued venture-backed companies that have recently gone public, such as ride-hailing apps Uber and Lyft.

A public listing by WeWork would still raise billions of dollars for the company and would be likely to rank as one of the largest IPOs of the year. Executives at the company are keen to list while the US stock market remains near record highs, given there have been persistent concerns raised by investors that global growth could slow next year.

WeWork declined to comment on its listing plans.

If the company can successfully raise more than $5bn through the new loan facility, it will help lift its total fundraising since 2010 when the company first opened its doors in a single office in New York City to more than $18bn.

That cash could go some way to allaying portfolio manager concerns as they weigh investing in WeWork as a public company and reduce the number of shares underwriters must sell in the listing.

The debate around the lossmaking group's valuation intensified last month after some early investors either sold their stakes or marked down the value at which they hold WeWork within their portfolios.

The company has expanded rapidly since then, helped by the backing of Japanese telecoms conglomerate SoftBank and investors including T Rowe Price and Fidelity. It now counts 485 offices in more than 30 countries, and has nearly half a million members.

WeWork has relied on cash injections to fund that growth and cover its rising losses. The group has racked up a deficit of more than $3.5bn since 2016, which has drained its cash reserves. Its cash and cash commitments dropped by $700m in the first quarter to $5.9bn.

The company is expected to meet bank analysts later this month, a step in the direction of a public float.

The company's chief executive, Adam Neumann, is likely to take questions on his investment in the group after it was revealed last week that he had raised at least $700m for himself through share sales and loans backed by his stake in the business.

Those transactions occurred before WeWork began the formal preparation for its listing, the Financial Times has previously reported. Mr Neumann told the FT in May that he did not plan to diversify his wealth broadly beyond WeWork.

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