Reuters

WeWork has a huge pile of debt, and now the firm's failed initial public offering has left it running out of cash much sooner than expected, the Financial Times said.

Two sources told the Financial Times that the firm's bankers were rushing to complete a new debt-financing deal as soon as next week to give WeWork the time to restructure.

JPMorgan Chase, the bank that advised on the firm's IPO, is leading the refinancing negotiations.

Last week, Fitch Ratings downgraded WeWork's debt even further into junk, with a scathing report that said the company had a "precarious liquidity position."

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WeWork is running out of cash. Fast.

Two sources told the Financial Times that the real-estate firm's bankers were rushing to complete a new debt-refinancing package as soon as next week, as the firm could be out of cash by the end of next month.

JPMorgan is reportedly leading the negotiations on refinancing — the bank also advised WeWork on its failed initial public offering. The bank is considering a sizable contribution to the package, according to the Financial Times, which cited several people familiar with the matter.

The paper added that the debt would come at a much higher cost than previous loans, given WeWork's recent financial history.

People familiar with the situation also told the Financial Times that JPMorgan was trying to get other banks involved with the refinancing — Goldman Sachs also played a major part in WeWork's IPO attempt, and the bank also recently rented out a WeWork office to be used as a backup trading floor.

SoftBank, which has been among the largest contributors to WeWork in the past through its Vision Fund, may now hold back on investing its cash.

The sources said SoftBank was in talks to add new funding, which could raise fundraising to $2.5 billion — bringing its total investment in the company to $11.5 billion.

But this could unravel depending on negotiations, the sources told the newspaper.

WeWork and JPMorgan declined to comment to Markets Insider.

Goldman Sachs and SoftBank did not immediately respond to Markets Insider's requests for comment.

Just last week, the credit-rating agency Fitch Ratings released a scathing report in which it downgraded WeWork's debt pile even further into junk, giving it a CCC+ status.

"WeWork will dramatically scale back its growth ambitions" that led the company to its "precarious liquidity position," Fitch said.

Fitch added: "The downgrade and outlook reflect WeWork's uncertain liquidity profile in the absence of its earlier plan to raise at least $3 billion in an IPO plus $4 billion in senior secured debt along with $2 billion in letter of credit capacity."

WeWork was aiming to raise roughly $3 billion to $4 billion from its IPO attempt, cash the growing but money-losing firm sorely needed.

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