TOKYO -- SoftBank Group has revived a $1.1 billion financing commitment to WeWork after fears over the U.S. office space provider's financial woes eased.
The senior secured debt, part of a $9.5 billion financing package to support WeWork after its initial public offering collapsed last year, was previously tied to a $3 billion tender offer for WeWork shares.
The debt commitment lapsed after SoftBank terminated the tender offer, but it was recently revived, according to people familiar with the matter. The debt facility has not been drawn, the people added.
After investing more than $10 billion in WeWork, SoftBank suffered large losses in the January-March quarter due a sharp decline in WeWork's valuation as well as its credit risk. But some of the credit-related losses were reversed in the April-June quarter after its creditworthiness improved, SoftBank said in its financial statement released this week.
The office space market has been hit by the new coronavirus as employees work from home. SoftBank founder and Chairman Masayoshi Son, however, has said he expects demand to grow for short-term contracts offered by WeWork as companies remain cautious due to the economic uncertainty caused by the pandemic.