SoftBank Group Corp is planning to invest an additional $1 billion or more in WeWork, altering a warrant agreement struck before WeWork postponed its IPO plans, the Financial Times reported, citing people briefed on the matter.
SoftBank initially planned to invest $1.5 billion in the U.S. office-sharing startup as part of a warrant agreement, giving WeWork the right to receive the money in April next year in exchange for Class A common stock.
A new deal would reduce the price per share at which SoftBank acquires WeWork stock, giving it a larger stake in the unprofitable property group, FT said on Wednesday. The investment could unlock more financing options for WeWork, which is in talks for a $3 billion to $4 billion loan from a consortium of banks, FT added.
WeWork declined to comment on the report. SoftBank did not immediately respond to a request for comment.
WeWork co-founder Adam Neumann resigned as CEO on Tuesday and gave up the majority of his voting control, after SoftBank - its biggest backer - and other shareholders turned on him over a drop in the U.S. office-sharing start-up's estimated valuation.
SoftBank invested in WeWork parent We Company at a $47 billion valuation in January, but investor skepticism led to a potential IPO valuation of as low as $10 billion earlier this month, Reuters reported.
We Company has said it is evaluating the "optimal timing" for an IPO.
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