Troubled office space provider Wework has unveiled a new plan to absolve itself from bankruptcy, but it does not involve Adam Nuemann its founder who was looking to regain control of the business.
On Monday, the US-business revealed a $450m (£359m) cash injection from senior lenders, which if approved, would allow the business to exit Chapter 11 Bankruptcy by its target of 30th May.
The company also said it plans to “eliminate all of its $4bn (£3.19bn) of outstanding, prepetition debt obligations”
A vote on the plan is expected to take place at the end of next month.
David Tolley, chief executive of the business, said: “WeWork is and has always been an industry leader.
“Over the past six months, we have worked extremely hard to develop a Plan for a reorganised WeWork that is better capitalised, more operationally efficient, and positioned for continued investment in our products and services and a return to long term growth.”
Yardi Systems, which acts as a vendor and creditor to Wework has agreed to inject $337m, taking a 60 per cent stake in the business.
Wework founder Adam Neumann submitted a $500m (£394m) bid to buy back the troubled coworking business.
A separate group of hedge funds will put the remaining $113m in.
Founder Adam Neumann had plans to buy the business back and merge it with his latest property company Flow.
An attorney for Flow told the Financial Times Neumann’s bid of $650m (£519m) was still higher than the one approved by the court and said he anticipated “robust objections to confirming this plan”.
The American businessman founded Wework in 2010 and oversaw the business when it hit a peak private market valuation of $47bn (£37bn).
He stepped down as chief after a failed IPO, which crushed its value after investors raised concerns about his running of the company.
City A.M. has contaced Flow for comment.