Monday 23 December 2019 9:59 am

Softbank's Wework financing talks stall

Softbank’s attempts to secure $3bn from three Japanese banks have stalled, creating a hurdle for the firm’s $9.5bn rescue plan for Wework.

Softbank is now likely to start the new year without the funding for the office sharing company in place, after two of the lenders hit internal lending limits to the firm.

Read more: Softbank taps Goldman for Wework debt financing plan

Mizuho Financial Group, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group are looking for ways to provide the funding while offsetting exposure, Reuters reported. 

One option is to use some of Softbank’s 26 per cent stake in Alibaba Group as collateral. 

“SoftBank is an important client so we want to do everything we can to help, but we have to consider our credit risk,” a senior banker told Reuters.

Softbank’s growing debt and support for embattled co-working group Wework has highlighted the company’s higher risk profile. 

“Banks cannot loosen their credit criteria only for SoftBank,” said S&P Global Ratings senior director Ryoji Yoshizawa.

In October Softbank said it would bail out Wework after it scrapped its initial public offering due to investor concerns over corporate governance and co-founder Adam Neumann. 

Softbank has 5.5 trillion yen in outstanding bonds and another four trillion yen in bank loans, according to Refinitiv data.

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