U.S. Markets open in 2 hrs 14 mins

SoftBank Taps Houlihan Lokey for WeWork Restructuring Advice

Gillian Tan, Liana Baker and Nabila Ahmed

(Bloomberg) -- SoftBank Group Corp. has tapped investment bankers at Houlihan Lokey to explore options for easing WeWork’s cash crunch, according to people with knowledge of the discussions.

Houlihan is working on cutting liabilities as WeWork mulls a separate deal that could hand control of the struggling office-sharing company to SoftBank, its biggest shareholder, according to the people. They asked not to be named as the discussions are private.

Other measures for restructuring WeWork’s balance sheet could include renegotiating or terminating some existing leases to reduce WeWork’s indebtedness and cash burn, the people said. Bankers are also reviewing WeWork’s financial reporting, accounting practices and projected building valuations, one of the people said.

Future lease payment obligations as of June 30 were $47.2 billion, according to the prospectus for WeWork’s aborted initial public offering.

WeWork prefers a plan led by JPMorgan Chase & Co. to arrange a $5 billion financing package to a SoftBank-led rescue package, Bloomberg has reported. The board of WeWork’s parent, We Co., is working with investment bank Perella Weinberg Partners LP, Bloomberg reported. Both Perella and Houlihan have extensive practices focused on restructuring debts for troubled companies.

Representatives for Tokyo-based SoftBank and Houlihan Lokey declined to comment.

WeWork is seeking to shore up its finances after pulling its IPO last month.

(Adds additional details in third paragraph.)

--With assistance from Eliza Ronalds-Hannon.

To contact the reporters on this story: Gillian Tan in New York at gtan129@bloomberg.net;Liana Baker in New York at lbaker75@bloomberg.net;Nabila Ahmed in New York at nahmed54@bloomberg.net

To contact the editor responsible for this story: Rick Green at rgreen18@bloomberg.net

For more articles like this, please visit us at bloomberg.com

©2019 Bloomberg L.P.