Deal could peg WeWork’s value below $8 billion

As WeWork prepares to cut potentially thousands of jobs this month and more executives head for the exits, SoftBank Group Corp. is assembling a rescue financing plan that may value the office-sharing company below $8 billion, according to people familiar with the discussions.

The new figure is a fraction of the $47-billion valuation the start-up commanded as recently as January. The talks are fluid and the terms could change, said the people, who requested anonymity because the discussions are private.

WeWork, reeling since it scrapped its initial public offering, has been considering dueling plans from SoftBank and JPMorgan Chase & Co. to shore up its finances before it runs out of cash as early as next month. The company’s board could make a decision as soon as this weekend, said some of the people familiar with the situation.

Representatives for WeWork and SoftBank declined to comment.

JPMorgan has been pitching investors on a $5-billion junk-debt package for WeWork. The unsecured and secured notes portion of the bank’s plan are being offered on a “best efforts” basis, said people familiar with the matter, meaning banks haven’t committed to funding the deal irrespective of investor demand.

The bank has been sharing its proposal with about 100 investors as it tries to line up support for what would be one of the riskiest debt offerings in recent years, people with knowledge of the matter said earlier this week.

Uncertainty around WeWork’s future has whipsawed its bonds in recent weeks. The debt plunged to record lows Tuesday as the company weighed a financing package that included debt that could yield 15%, only to erase those losses a day later amid reports that SoftBank was considering a new investment.

The debt currently trades at about 85 cents on the dollar, and hasn’t been near par since before the company pulled its IPO last month.