Shared office operator WeWork stated Tuesday it has planned a $1.75 billion letter of credit with Goldman Sachs that’s in the process of being syndicated and whose funds are expected to be available in January.
The credit line is a part of SoftBank Group Corp’s $9.5 billion bailout that was declared in October when money-losing WeWork was on the point of running out of cash after its intentions to go public were abruptly withdrawn a month before.
The three-part bailout included a young offer of as much as $3 billion to purchase privately-held WeWork shares, the acceleration of a $1.5 billion payment from SoftBank that was due next year, and about $5 billion “We’re pleased that SoftBank Group and WeWork have entered into a commitment letter with Goldman Sachs for a brand new $1.75 billion senior secured letter of credit facility,” WeWork mentioned in an announcement in new debt including the line of credit.
WeWork is not going to be required to post cash collateral on the new credit facility, the assertion stated.
When the bailout was declared, SoftBank stated funding for the new debt would happen after the tender offer was completed.
The tender is released but yet not expected to be finished till the first quarter of 2020, subject to regulatory permissions and closing conditions, a source with information on the matter stated.
The Goldman supported letter of credit is predicted to free up nearly $800 million in restricted cash, the source stated.