WeWork Global plans to divest its 27% stake in WeWork India

WeWork India: Co-working giant WeWork Global, currently undergoing bankruptcy proceedings in the US, is in discussions with potential investors to divest its entire 27 per cent stake in WeWork India, aiming to capitalise on its investments, according to sources familiar with the matter. 

Bengaluru-based real estate firm Embassy Group, holding the remaining 73 per cent stake in WeWork India, is also considering diluting some of its shareholdings to raise additional funds, the sources added.

Established in 2017, WeWork India operates across 54 locations in key cities such as New Delhi, Bengaluru, Mumbai, Gurugram, Noida, Pune, and Hyderabad, with a total asset portfolio exceeding 8 million square feet. The company reported a turnover of Rs 1,400 crore during the fiscal year 2022-23.

In June 2021, WeWork Global injected $100 million into WeWork India, acquiring a 27 per cent stake, which proved crucial in navigating financial challenges exacerbated by the COVID-19 pandemic, particularly within the office market.

WeWork India CEO Karan Virwani declined to provide a comment when approached for clarification. However, sources indicate that even if WeWork Global divests its entire stake and exits the Indian market, WeWork India will retain the rights to use the brand name, albeit subject to payment of associated fees.

WeWork Global initiated bankruptcy proceedings in the US in November last year, initiating a comprehensive restructuring process aimed at reducing debt and fortifying its financial position. However, the proceedings do not encompass its centres located outside the US and Canada.

Despite the upheaval in its global operations, WeWork India asserts its independence from WeWork Global, affirming that its day-to-day operations remain unaffected. Virwani reiterated the company's commitment to its members, landlords, and partners, underscoring its continued use of the brand name as part of the operating agreement.

(With PTI inputs)