WeWork is now reportedly talking with JPMorgan about a $5 billion credit line and could run out of cash next month without it

wework new ceos 4x3We Company; Samantha Lee/Business Insider

  • WeWork and lenders led by JPMorgan are discussing a $5 billion credit line for the struggling company, Bloomberg reported.
  • The commercial real estate giant could run out of cash as soon as next month, Bloomberg and the Financial Times both reported.
  • The amount of financing it's now seeking is bigger than previously reported, and the amount of time it has left before it runs out of cash is significantly shorter.
  • WeWork was expecting to raise $3 billion in an initial public offering last month, which would have also unlocked $6 billion in additional debt financing, but all that fell through when it shelved its IPO.
  • Read all of Business Insider's WeWork coverage here.

WeWork is talking with lenders about a $5 billion lifeline, in an effort to forestall imminent insolvency, Bloomberg reported on Friday.

JPMorgan, which has previously loaned money to the commercial real-estate giant and was set to be the lead underwriter on its failed initial public offering, is heading up the effort, according to both Bloomberg and an earlier report in the Financial Times. A deal could be closed as soon as next week, both outlets reported.

Unless it gets new financing, WeWork could run out of money as soon as next month, according to both reports. That timeline is much shorter than previous estimates, including by Business Insider. Those earlier projections indicated that WeWork, without another cash infusion, likely could last until the middle of next year.

Read this: WeWork could face a cash crunch as soon as February. Industry watchers think SoftBank, its lenders, and the entire industry has too much at stake to let it go under.

Representatives for WeWork and JPMorgan did not immediately respond to emails seeking comment.

WeWork's cash is running low

The amount of new funds under discussion is about a quarter larger than previous reports suggested it was seeking, adding a further indication of the pressure it's under.

WeWork was planning to raise some $3 billion in an IPO last month, a move that would have unlocked another $6 billion in debt financing from JPMorgan and other lenders. When the IPO fell through, so too did the original debt deal.

The company would pay a high price for the new loans. The interest rate would reportedly be significantly higher than the Libor rate plus 4.75 percentage points it was set to pay under the previous, but now cancelled, debt deal, according to the two reports.

Since the company shelved its IPO, WeWork has ousted its CEO, Adam Neumann, and numerous executives, made plans to sell off or shut down subsidiaries, including its WeGrow private school, and put its corporate jet up for sale.

Got a tip about WeWork or another company? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.

/www.businessinsider.com/wework-used-disounts-to-convince-tenants-to-relocate-new-locations-2019-9

Got a tip about WeWork or another company? Contact this reporter via email at twolverton@businessinsider.com, message him on Twitter @troywolv, or send him a secure message through Signal at 415.515.5594. You can also contact Business Insider securely via SecureDrop.
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