WeWork Inc (NYSE:WE) said its office spaces will remain open as it works to reduce its debt obligations and carries out a restructuring after filing for bankruptcy protection.
The New York-based office space rental company on Monday evening confirmed that it has filed for Chapter 11 bankruptcy protection in New Jersey, following reports last week that it was preparing to file.
According to the bankruptcy filings, the company’s debt is more than $18.6 billion and it listed $15 billion in assets.
It said in its filings it has entered into a tentative restricting deal with investor SoftBank Group to reduce its debt by $3 billion.
The company is also requesting the ability to reject the leases of more than 60 leases across North America. WeWork currently operates coworking and office spaces in 40 cities across North America, per the company's website.
“WeWork is requesting the ability to reject the leases of certain locations, which are largely non-operational and all affected members have received advanced notice,” the company said in a statement.
WeWork CEO David Tolley added: “Now is the time for us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet.”
While specifics were not provided around which leases WeWork intends to exit, Switzerland-headquartered IWG, which runs Regus and Spaces, claimed it has already acquired some former WeWork sites and it may take on even more.
It did not specify the exact number of sites it has acquired or their locations.
Valued at about $47 billion in January 2019, WeWork’s market capitalization has plummeted to about US$45 million as it has grappled with continued substantial losses on declining demand for office rentals and a heavy debt pile.
WeWork shares were halted on Monday at US$0.84, down 98.5% in the year to date.
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