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Bond Market News
WeWork’s Restructuring Plan Approved; Will Exit Bankruptcy
May 31, 2024
WeWork won the approval for its restructuring plan yesterday from a bankruptcy court. With this, the company has cleared the path to exit bankruptcy and shed the legacy of its former owner Adam Neumann. According to the restructuring plan, its future rent obligations will be cut in half to $12bn overall. The restructured company will be worth between $665-865mn when it leaves Chapter 11. This is a fraction of its once peak valuation of $47bn. Secured creditors will receive 3-5 cents on the dollar depending on the debt they own. Lower ranking bondholders will receive 4 cents on the dollar under the restructuring while other unsecured creditors will get back just 1 cent on the dollar. WeWork entered Chapter 11 last November, after it failed to pay a coupon on its bonds.
WeWork’s bonds are already trading at deeply distressed levels of 2-3 cents on the dollar.
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