WeWork India will continue to hold rights to use brand name, operate independently: Karan Virwani
In a statement, WeWork India CEO Karan Virwani clarified that the India operation would have no impact, and the entity would continue to operate independently of WeWork Global, which filed for bankruptcy in the US and Canada.
WeWork India CEO Karan Virwani clarified that the India operation would have no impact, and the entity would continue to operate independently of WeWork Global.
The development comes after New York-based workspace provider filed for bankruptcy in the US and Canada.
On Monday, WeWork Global and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code.
The company said its franchisees around the world, including India, will not be affected by the proceedings in the US and Canada.
“WeWork India operates independently of WeWork Global, and our operations will not be affected in any manner. It is a separate entity in itself, and we are not a part of this strategic reorganisation process. The Chapter 11 filing does not impact the operations of the global entity as it continues to remain in possession of its business, operating as usual,” said Virwani in a statement.
He further added, “The process restructures the debts and the leases of WeWork Global in the US and Canada. During this period, we will continue to hold the rights to use the brand name as part of the operating agreement, while serving our members, landlords, and partners as usual.”
Backed by SoftBank, Insight Partners, BlackRock and Goldman Sachs, WeWork had raised over $22 billion in funding from investors and was once valued at close to $50 million.
However, it has been grappling with financial challenges since the pandemic as demand for shared workspace decreased while rent obligations to landlords increased to billions of dollars.
Despite past restructuring efforts, it has not been able to recover from distressed levels.
As of June 30, the company’s real estate portfolio comprised 777 locations across 39 countries, supporting approximately 906,000 workstations and 653,000 physical memberships.
While the company is yet to divulge details on the restructuring process, it has requested the ability to cancel leases in particular locations that WeWork described as largely non-operational. All affected members have received advanced notice, the company said in a late Monday announcement.
As per the bankruptcy filing, the Adam Neumann-founded company reported estimated assets and liabilities ranging from $10 billion to $50 billion.
David Tolley, CEO of WeWork said that now is the time for “us to pull the future forward by aggressively addressing our legacy leases and dramatically improving our balance sheet”.
“I am deeply grateful for the support of our financial stakeholders as we work together to strengthen our capital structure and expedite this process through the Restructuring Support Agreement. We remain committed to investing in our products, services, and world-class team of employees to support our community,” he said in a statement.
Meanwhile, WeWork India is one of the company's fastest-growing international affiliates outside the United States. It is backed by a majority shareholder—Embassy Group—which holds the control to run and operate the business in India.
“We have achieved consistent and sustainable growth, operationally and financially. WeWork India has been profitable since 2021, and we are committed to the robust growth and success of the business and the industry,” Virmani said.
Edited by Affirunisa Kankudti