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NEW DELHI: US-based co-working startup WeWork’s move to file for bankruptcy will not impact WeWork India’s business as it operates independently of WeWork Global, Karan Virwani, CEO at WeWork India, said.
The Indian entity is backed by Bengaluru-based real estate firm Embassy Group, which holds a majority 73% stake in the company. “WeWork India has been profitable since 2021 and we are committed to the robust growth and success of the business and the industry…our operations will not be affected in any manner,” Virwani said on Tuesday.
WeWork has a 27% shareholding in WeWork India. In a release issued on Monday, the company said that WeWork’s locations outside of the US and Canada are not part of the bankruptcy process and accordingly, its franchisees around the world are not affected by these proceedings. “WeWork Inc and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code and intend to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act,” the firm said. In its court filing, WeWork revealed nearly $19 billion in debt. The SoftBank-backed startup had posted consolidated loss of $397 million in the June quarter.
Trouble at WeWork, which was once a high-flying startup with a valuation of $47 billion at its peak, unfolded following a failed attempt at going public in 2019 and the pandemic, which crippled businesses operating in the shared office spaces market. In August, the company had said that there is doubt about its ability to keep operating as a going concern.
“The (Chapter 11 filing) process restructures the debts and 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,” Virwani said. WeWork India currently runs co-working spaces across 50 locations in seven cities.
The Indian entity is backed by Bengaluru-based real estate firm Embassy Group, which holds a majority 73% stake in the company. “WeWork India has been profitable since 2021 and we are committed to the robust growth and success of the business and the industry…our operations will not be affected in any manner,” Virwani said on Tuesday.
WeWork has a 27% shareholding in WeWork India. In a release issued on Monday, the company said that WeWork’s locations outside of the US and Canada are not part of the bankruptcy process and accordingly, its franchisees around the world are not affected by these proceedings. “WeWork Inc and certain of its entities filed for protection under Chapter 11 of the US Bankruptcy Code and intend to file recognition proceedings in Canada under Part IV of the Companies’ Creditors Arrangement Act,” the firm said. In its court filing, WeWork revealed nearly $19 billion in debt. The SoftBank-backed startup had posted consolidated loss of $397 million in the June quarter.
Trouble at WeWork, which was once a high-flying startup with a valuation of $47 billion at its peak, unfolded following a failed attempt at going public in 2019 and the pandemic, which crippled businesses operating in the shared office spaces market. In August, the company had said that there is doubt about its ability to keep operating as a going concern.
“The (Chapter 11 filing) process restructures the debts and 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,” Virwani said. WeWork India currently runs co-working spaces across 50 locations in seven cities.
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