Breaking: Temasek Holdings and Trustbridge Partners Are Bargaining To Increase Stake In WeWork China
WeWork China investors are wrestling for control-—I suspect to preserve their equity as WeWork burns through cash and barrels toward bankruptcy
Reuters is reporting that Temasek Holdings and Trustbridge Partners are bargaining with WeWork to increase their significant stake in WeWork China to a controlling interest.
The bigger takeaway is that roadblocks I've been tracking continue to mount for Softbank Group (9984 JP) and its rescue plan for WeWork remains stalled more than two weeks after I reported it had hit a wall with its banks (see my report “WeWork Still Failing Expensively; Softbank Struggling to Foot the Bill,” 1/16/20).
It’s now approaching three months since Softbank won its bid to takeover WeWork, and it hasn’t been able to get past step one: finance its tender offer for the majority of WeWork shares.
More startling is the implication that massive Softbank apparently doesn’t have the liquidity or borrowing capacity to arrange the $3 billion it already had pledged to fund the tender. In the meantime, WeWork is likely almost if not entirely out of cash and having zero luck renegotiating $47 billion in crippling leases which comprise its most expensive and most immovable expense.
I suspect Temasek and Trustbridge could be trying to carve out WeWork China to preserve their own equity ahead of dire alternatives which I have speculated Softbank might be driven to pursue to get WeWork out of the ditch—including bankruptcy.
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