Workspace provider WeWork Inc on Tuesday raised "substantial" doubt regarding its ability to continue as a going concern, warned of a possible bankruptcy and added three of its board members had stepped down. Its shares were down 27 percent in extended trading.

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However Karan Virwani, CEO, WeWork India told CNBC-TV18 that the Indian business will not impacted by the global development.

“Since inception, WeWork India has been backed by the Embassy Group who holds the majority stake and control to run and operate WeWork Global’s business in India. Any development globally has no impact on our business here. Despite the challenges brought on by the pandemic, we emerged profitable early last year. We ended FY 2022-23 with a revenue of Rs 1400 cr, and Rs 250 cr in earnings. We have built a strong network of local stakeholders, members, landlords and developers who are increasingly looking to partner with us.” he said.

On the global front WeWork has also issued a warning that its management needed to raise additional capital to keep the firm afloat and maintain liquidity over the next year.

“If we are not successful in improving our liquidity position and the profitability of our operations, we may need to consider all strategic alternatives, including restructuring or refinancing our debt, seeking additional debt or equity capital, reducing or delaying our business activities and strategic initiatives, or selling assets, other strategic transactions and/or other measures, including obtaining relief under the US Bankruptcy Code,” the company said, CNBC reported.

The company had previously said its actions to restructure debt and operations had eased worries over its ability to continue as a going concern.

WeWork struck deals in March to cut its debt by about $1.5 billion and extend the date of some maturities to preserve cash.

The company, which is yet turn a profit since going public, has struggled to cope with the troubles in the tech sector, where mass layoffs have become rampant.

It has also seen an exodus of top executives, including the resignation of CEO Sandeep Mathrani and CFO Andre Fernandez this year, compounding its troubles.

Mathrani was hired in 2020 and tasked with the company's turnaround amid rising investor concerns over corporate governance standards.

WeWork on Tuesday said it was still continuing its search for a permanent CEO and that it had added four board members after three members stepped down.

With inputs from Reuters

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First Published:Aug 9, 2023 7:00 AM IST