WeWork Inc. made an announcement late Monday stating that it would be deferring some interest payments in order to have discussions with its lenders and maintain its liquidity.
According to a filing with securities regulators, the payments amount to approximately $37.3 million in cash and $57.9 million in debt and were originally due on Monday. WeWork WE, -1.99%, a provider of co-working spaces, has a 30-day grace period to fulfill these interest payments.
Following the news, WeWork’s shares experienced a decline of 1.7% during the extended session on Monday, after already ending the regular trading day with a 2% decrease.
While WeWork has the means to make the interest payments, it stated in the filing that it has entered the grace period to initiate discussions with specific stakeholders in its capital structure, while simultaneously enhancing its liquidity as it works on executing its strategic plan.
“As part of this strategic plan, the company is focused on rationalizing its real estate footprint and improving its capital structure,” WeWork explained.
Earlier in August, WeWork expressed doubts about its ability to remain in business, causing its stock to plummet by 24%. In the second quarter, WeWork incurred a loss of $397 million and had $680 million of liquidity at that time.
Year-to-date, WeWork’s shares have suffered a decline of 95%, in stark contrast to the approximately 12% gain for the S&P 500 index SPX.
