WeWork Global Moves to Sell 27% Stake in Indian Unit Amid Financial Restructuring

In a significant development in the co-working space sector, WeWork Global is reportedly in discussions to offload its entire 27% stake in WeWork India. This move is part of the company's broader efforts to monetize its investments following its bankruptcy filing in the US.

The potential divestiture comes as WeWork Global, once a trailblazer in the shared workspace industry, seeks to navigate through financial turmoil, including a comprehensive reorganization and restructuring strategy aimed at reducing its debt and bolstering its financial standing.

Embassy Group, a major real estate player based in Bengaluru, which currently holds a 73% stake in WeWork India, is also considering diluting some of its shareholdings to raise additional funds.

WeWork India, established in 2017, has rapidly expanded its footprint across major Indian cities including New Delhi, Bengaluru, Mumbai, Gurugram, Noida, Pune, and Hyderabad, amassing over 8 million square feet of assets across 54 locations. Despite the challenges posed by the COVID-19 pandemic, which had a severe impact on the office market globally, WeWork India has shown resilience and growth, posting a turnover of Rs 1,400 crore in the fiscal year 2022-23.

The investment by WeWork Global in June 2021, amounting to USD 100 million for a 27% stake, was a strategic move to support the Indian unit during the pandemic's financial strains. However, with WeWork Global's bankruptcy in the US filed in November of the previous year, the company has made clear that its centers outside the US and Canada, including those in India, are not affected by this proceeding.

WeWork India has asserted its operational independence from the global proceedings, with CEO Karan Virwani emphasizing that the development in the US will not impact the Indian operations. The company plans to continue using the 'WeWork' brand, for which it will pay a fee, ensuring continuity in its services and commitments to members, landlords, and partners.

This development is part of a broader narrative involving WeWork's rise and challenges. The company, backed by Softbank and once valued at a staggering USD 47 billion, has faced significant setbacks, leading to adjustments in its business strategy and operations.

As WeWork Global looks to streamline its operations and recover from its financial hurdles, the future of WeWork India will hinge on how effectively it can continue to operate independently and capitalize on the growing demand for flexible workspaces in India.