The UK subsidiary of troubled US co-working startup WeWork posted a comprehensive loss of £123m for 2022 and revealed it owes the parent company £731m.
WeWork International, the London-based subsidiary of the New York firm that filed for bankruptcy last year, reduced its losses by just 14% compared with the year prior as the recovery from the impact of Covid-19 has been slower in London than the firm had hoped.
The firm boosted its revenue by 165% to £59.4m while marginally cutting admin expenses. However, its directors’ report stated “full recovery [from Covid-19 losses] has been slower than expected in certain markets”.
The financial results also revealed it had loans payable from group undertakings of £731m. WeWork International’s principal activity is to act as a holding company for investment into the UK operations of its parent company.
WeWork filed for Chapter 11 bankruptcy in November last year after collapsing in value from $47bn to less than $1bn and delisting from the New York Stock Exchange.
As a separate entity, WeWork International is not part of the parent company’s bankruptcy procedure. The directors’ report, however, stated its operations are “intrinsically linked to the ongoing trading position of the group headed by WeWork”.
The co-working space business cited macroeconomic concerns for causing higher member churn and a weaker general demand. The firm will seek to reduce its rent and tenancy expenses and cut member churn while seeking additional capital through debt or equity securities or asset sales.
The report concluded that there was a “significant doubt on the company’s ability to continue as a going concern”.