Softbank is planning to invest an extra $1bn in flexible office space provider Wework, changing a warrant agreement made before the firm delayed its initial public offering (IPO) plans.
The Japanese investor originally agreed to pump $1.5bn into the co-working startup, allowing Wework to access the funds next April in return for Class A common stock.
The new agreement, first reported by the Financial Times, would give Softbank a larger share in the company as it reduces the price per share at which it acquires Wework stock.
Wework is currently in talks for a $3bn to $4bn loan from a group of banks, the newspaper added.
This week Wework co-founder and chief executive Adam Neumann resigned and gave up the majority of his voting control after Softbank, which is the firm’s biggest backer, and other investors turned against him due to a drop in the customer’s estimated valuation.
Last week the company pulled plans to go public after a lack of investor enthusiasm.
In 2018, Morgan Stanley put the firm’s valuation as high as $104bn and a private placement in January put the value at $47bn.
However, the postponed IPO would have given the business a valuation of $15bn.
Main image credit: Getty