WeWork India fighting new capital after discussions with local lender collapse.
WeWork’s India franchise has seen talks with local lender ICICI Bank Ltd on $100 million in funding break down since The We Business’s botched stock market launch, and is in early discussions to increase $200 million by new investors, the enterprise’s main shareholder Jitu Virwani said on Thursday.
Virwani’s Embassy Group, endorsed by U.S. personal equity finance Blackstone Group Inc, set up WeWork India two years back and was in discussions to sell the bulk of the operation to WeWork’s global parent We Business.
Virwani said those talks were put on hold indefinitely and that Embassy was raising around 40 billion rupees ($563.06 million) in sales of a few its assets it might invest in WeWork India if need be.
“Even if we must put all that money to increase WeWork India, we’ll last” Virwani, a Dubai-based billionaire whose kid, Karan Virwani, heads WeWork India, told Reuters in an interview.
Following one of their most dramatic drops of a stock exchange flotation lately, New York-based WeWork jettisoned creator and Chief Executive Officer Adam Neumann last month and embarked on a financial turnaround targeted at sealing fresh investment.
Investors have expressed concerns about its burgeoning losses in addition to how well a business model that involves taking long-term leases and leasing out spaces for your brief term will weather a worldwide downturn.
Unlike operations in different countries, such as Japan, in which WeWork comes with an ownership stake, Embassy setup WeWork India as a company, and was reported earlier this season by Indian press to be in talks to sell a 70% stake to We Company for $2.75 billion.
It currently has a capacity of 45,000 chairs that it plans to double by the end of 2020, and has operations in six major cities across India.