SoftBank readies $9.5bn WeWork rescue package

The Japanese conglomerate would also accelerate a $1.5 billion equity investment in the company - scheduled for next year - and SoftBank Chief Operating Officer Marcelo Claure will take over as chairman of the startup, the person said.

Japan-based SoftBank is ready to buy a controlling stake in WeWork, providing the shared office space startup desperately needed funding at a slashed valuation, a source told AFP on Monday.

WeWork needs to raise at least US$3 billion to cover its financing needs through the end of the year, according to sources.

An IPO filing by We Co. revealed that WeWork, which had a high-flying valuation of $47 billion following a $2 billion funding round by SoftBank announced in January, had a net loss of $1.9 billion previous year.

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With the office-sharing company almost out of cash, CNBC reported on Monday that the investment vehicle led by Japanese billionaire Masayoshi Son will shell out between $4 billion and $5 billion in fresh funding, sources told the outlet. SoftBank's Saudi Arabia-backed Vision Fund, which invested alongside Son's company in earlier funding rounds, is not expected to contribute to the financing.

Neumann now controls an economic stake of just over 20% in an investment vehicle with his co-founder, Miguel McKelvey. If accurate, the deal values WeWork near $8 billion - a staggering drop from the $47 billion once proffered by the company when it first filed to go public. Those voting rights were cut to three times those of ordinary shares when Neumann was ousted as chief executive last month.

Buffeted by skepticism from investors and questions about its governance, the company - which has yet to turn a profit - is reportedly working with JPMorgan Chase (JPM) to arrange fresh capital as a cash crunch looms. Not to be redistributed, copied or modified in any way.

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