WeWork India, a leading coworking company, is contemplating selling a 27% stake held by the US-based parent company's founder Adam Neumann in its Indian arm. Enam Group's family office as well as Mithun Sacheti and A91 Partners have started preparing to acquire the stake held by WeWork for INR 1,200 crore, as per the Economic Times report.
According to sources, the stake offloading process involves selling existing shares. However, the scope remains for a primary component. Embassy Group, which owns a 73% stake in WeWork India, will oversee the share transfer process. However, the company is looking for clearance from the Competition Commission of India (CCI).
WeWork India, however, chose not to comment on the report. WeWork India CEO, Karan Virwani, had earlier stated that the Indian unit operations stayed unaffected despite the company raising enormous doubt about its capability to continue doing business.
The company recorded revenue worth INR 1,400 crore in FY23 and earned INR 250 crore during the period.
The SoftBank-backed company, however, suffered a net loss of $696 million during the first half of 2023. Despite losses having reduced from the $1.4 billion mark reported during the same period a year back, the company's long-term debt swelled to $2.9 billion as of 30th June 2023. The real estate firm Embassy Group had established a joint venture with WeWork to enter the Indian market, in 2017.
WeWork India, in June 2023, finalised a lease deal for 2.2 lakh square feet of office space in Bengaluru to form three new centres with a total capacity of 3,600 desks. The company also obtained office space of more than 1 lakh square feet in Hyderabad, offering space for 1,500 desks, while occupying office space of 54,000 square feet in Delhi, according to the latest startup industry news.
What Does YFS Have to Say on Stake Sale by WeWork India?
It is still unclear what led to WeWork planning a stake sale in the Indian arm. The rising losses are a matter of concern though, opines Your First Startup (YFS).