WeWork outlines free cash flow targets
WeWork has set out its aim to become free cash flow positive by 2022, while targeting its first $1bn revenue quarter this year.
The workspace giant plans to achieve free cash flow of more than $1bn (£770m) by 2024 as part of its five-year turnaround plan.
After executing its strategy, WeWork said it expected to have additional liquidity of $2.5bn-3bn for future growth. It also plans to reach 1,000 locations worldwide by 2021.
WeWork has set out its aim to become free cash flow positive by 2022, while targeting its first $1bn revenue quarter this year.
The workspace giant plans to achieve free cash flow of more than $1bn (£770m) by 2024 as part of its five-year turnaround plan.
After executing its strategy, WeWork said it expected to have additional liquidity of $2.5bn-3bn for future growth. It also plans to reach 1,000 locations worldwide by 2021.
Real estate veteran Sandeep Mathrani was named as WeWork’s new chief executive earlier this month, as part of the turnaround.
Meanwhile, Kirthiga Reddy, a technology executive and partner at SoftBank Investment Advisers, has joined the board of directors, replacing Ron Fisher as SoftBank Vision Fund’s designated representative.
Three directors – Mark Schwartz, Steve Langman and Lew Frankfurt – have stepped down.
The company has also closed a $1.75bn senior secured letter of credit facility with Goldman Sachs.
Citibank, DBS Bank, Deutsche Bank, Mizuho, Natixis and Société Générale also participated in the syndication as joint lead arrangers and joint bookrunners.
Under the new facility, WeWork is not required to post any cash collateral and will be able to access $800m of new working capital.
Marcelo Claure, executive chairman of WeWork, said: “This new letter of credit facility – which offers better terms and frees up significant balance sheet capital – marks the latest milestone in WeWork’s evolution.
“We will continue to improve the company’s financial position, implement our new operating model and pursue disciplined growth on our path to adjusted EBITDA profitability by next year.”
WeWork has also entered into a master note purchase agreement in December to formalise SoftBank’s commitment to provide up to $2.2bn in unsecured debt.
This, on top of the new credit line and an additional commitment from SoftBank to provide up to $1.1bn of secured debt financing, forms part of SoftBank’s $9.5bn rescue deal with WeWork.
WeWork’s objectives:
2020: First-ever $1bn revenue quarter
2021: Adjusted EBITDA positive
2022: Free cash flow positive
2023: 1m memberships
2024: $1bn-plus of free cash flow
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