WeWork, a US-based office sharing space, is set to exit its operations in India. The company plans to sell 27 per cent of its stake, as per a report by the Economic Times. The selling will happen through a secondary transaction.
As per the report, the proposed deal worth around Rs 1,200 crore will lead to a reduction in the ownership stake of Bengaluru-based property developer Embassy Group from 73 to 60 percent. Embassy Group is a real estate developer that offers commercial, real estate, and residential buildings in Bengaluru.
Also Read: WeWork's $47 Billion Valuation Turns to Dust as The Firm Files For Bankruptcy
Currently, Embassy Group, the promoter of WeWork, owns 73 percent of the firm. The remaining stake is owned by 1 Ariel Way Limited, a UK-based subsidiary of WeWork Global. The total stake in WeWork and Embassy Group, which is 40 percent, will be acquired by “Enam Group family office, investment fund A91 Partners, and CaratLane founder Mithun Sacheti,” says the report.
A source quoted in the Economic Times report said, “The deal involves the sale of WeWork Inc.'s shareholding in the Indian business, which is being run by the Embassy Group." While most of the Rs 1,200 crore is through the secondary sale of shares, there may be a primary component later on.” The source further said that as of now, the company is waiting for clearance from the Competition Commission of India (CCI.
WeWork was founded by Adam Nuemann and Miguel McKelvey in 2010 in the United States. Once valued at $47 billion, the company filed for bankruptcy in the US market. Expensive leases, cancellations by corporate clients, and a shift towards working from home were some of the reasons that made it shift towards bankruptcy.
However, the company’s India branch remained unaffected, and it mentioned that it was independent. As per Moneycontrol, Karan Virwani, CEO, WeWork India, said, “The global team needs continuous funding to grow their business. Ours is different; we are making money and do not need external capital. The global team looked at our model and how successful it was, then made it the benchmark for them to execute everywhere else in the world.”
Interestingly, the company’s exit is coming at a time when there has been a revival of coworking spaces in India. For example, in Q1 2023, the coworking space share increased to 27 percent from 14 percent in Q1 2019.
