WeWork will only pay about $95 million in interest if they want to talk with their lenders.
WeWork Inc. said late Monday that it would not be making some interest payments so that it could talk with its lenders about its choices and keep some of its cash on hand.
Each payment is due on Monday and is made up of about $37.3 million in cash and $57.9 million in debt, the company said in a filing with securities officials. WeWork WE, -1.99%, which offers co-working places, gives people 30 days to pay their interest.
After closing the regular trading day down 2%, WeWork shares fell 1.7% in the late session on Monday.
Our company has the cash on hand to pay the bills and “may in the future decide to do so,” the filing said. But entering the grace period is meant “to allow discussions with certain stakeholders in the company’s capital structure to commence, while also enhancing liquidity as the company continues to take action to implement its strategic plan,” the statement read.
As part of its business plan, WeWork said the company is working to reduce the amount of real estate it owns and improve its capital structure.
In August, WeWork said there was “substantial doubt” that it could stay in business. Its price dropped 24% after that news came out. They lost $397 million in the second quarter but had $680 million in cash at the time.
So far this year, shares of WeWork have dropped 95%, while the S&P 500 index SPX has gone up about 12%.
