WeWork reaches deal to convert $1 billion of SoftBank’s debt to equity

FILE PHOTO: The WeWork logo is seen on a cup at a WeWork office in Beijing

(Reuters) -WeWork Inc said on Friday it had reached a deal to convert about $1 billion of key investor SoftBank Group Corp’s unsecured notes into equity, in an effort to restructure its finances.

Shares of the company rose 2.2% to $1 before the bell.

The company, which offers workstations, private offices and customized floors, had enjoyed a pandemic-driven shift to flexible work outside traditional offices, but is now gearing up for a potential fallout from a likely economic downturn.

Last month, WeWork forecast weak current-quarter revenue in a sign that its business was feeling the heat of mass layoffs, as companies reduce their real estate footprint.

In January, the New York-based company also planned to eliminate about 300 roles across countries after announcing last year that it would exit about 40 underperforming U.S. locations due to high expenses and a strong U.S. dollar.

(Reporting by Kannaki Deka and Priyamvada C in Bengaluru; Editing by Maju Samuel and Shailesh Kuber)