NEW YORK (AP) — Credit ratings agency S&P is raising concerns that WeWork won't be able to raise the money to fund its aggressive growth plans after the office-space company failed to drum up interest for a public offering of shares.
S&P Global Ratings said Thursday that it is lowering the rating on the company to B-minus from B. The rating indicates that S&P feels WeWork could have trouble meeting its financial commitments if its business prospects or the economy take a turn for the worse.
New York-based WeWork delayed its IPO earlier this month. Potential investors were concerned about the company's mounting losses and its eccentric chief executive's management style and perceived conflicts of interest.
CEO Adam Neumann agreed this week to step aside from the company.
The Wall Street Journal reported Thursday that Neumann's replacements have been racing to make changes at WeWork's parent company We Co., including pushing out nearly 20 of Neumann's friends and family members.
We's new co-chief executives, Artie Minson and Sebastian Gunningham, are also reportedly planning to chart a new course for the formerly freewheeling company. They are expected to trim thousands of positions from the company's staff and are looking to sell businesses outside its core office-leasing operation, the newspaper reported, citing unnamed sources.
Their goal is to prepare a slimmed-down company for a public offering that would raise much-needed cash, likely next year.
The company declined to comment.