SOVEREIGN DEBT RESTRUCTURING | MASTERCLASS

A deep dive masterclass on sovereign debt restructuring, to be conducted virtually by Asian high yield bond expert Florian Schmidt.

30 June 2022 (Thu), 5pm Singapore/HK time

SoftBank Group Corp. (SBG) announced that it has entered into a settlement agreement with Adam Neumann and the Special Committee of the Board of Directors of WeWork Inc on February 25, under which it would pay ~$1.6bn to buy shares from WeWork’s early investors. The deal is ~50% lower than the original offer of $3bn by Softbank to bail-out the office space rental company after WeWork’s failed IPO attempt in 2019 that resulted in a reduced valuation of ~$10bn against the expected IPO valuation of $47bn. Later, Softbank retracted from the bail-out deal as the demand for office space reduced due to the pandemic, resulting in a legal battle between Softbank and the Special Committee including Neumann. According to SBG, “The Special Committee of the Board of Directors of WeWork Inc. and Adam Neumann filed two lawsuits against SBG and SoftBank Vision Fund (AIV M1) L.P. in the Court, seeking declaratory relief for breach of contract and breach of fiduciary duties to close the tender offer pursuant to the Master Transaction Agreement, specific performance to close the USD 3 billion tender offer…” After the deal to end the legal dispute, which includes Neumann’s stake worth ~$480mn, Softbank’s stake would increase by 10.5% and Neuman would not be a part of the company Board. The settlement of the legal dispute will pave the way for a second attempt at IPO. Softbank would have the options of either combining WeWork with a special purpose acquisition company (SPAC) BowX Acquisition or follow a traditional IPO route. Marcelo Claure, executive chairman of WeWork, said the settlement was “the result of all parties coming to the table for the sake of doing what is best for the future of WeWork”.

WeWork’s 7.875% 2025s were down 0.5 to trade at 91.5. The bonds were trading in the mid 80’s level for most part of Feb.
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