Office rental company WeWork has been grappling cash problems in recent months following a botched IPO. It now seems like Softbank Group (OTCMKT:SFTBY) will take over the company for less than $10 billion and further sideline Adam Neumann, the founder of the company.

Cash strapped WewWork looks at Softbank for a bailout

There were plans to take WeWork public in a bid to raise cash through an IPO, but the plan failed to materialize. Surprisingly some investors were against the move, and they cited concerns regarding its business model, leadership as well as conflicts of interest. Following the stepping down of Neumann last month, the new co-CEO canceled plans to go public. The co-CEO has instituted cost-cutting measures, several laid-off employees, and closed the educational arm of the company WeGrow.

The company has witnessed its credit rating dip to junk status and faces a cash crunch as soon as the end of next month. The company is considering options for saving face. It may be looking at Softbank to pump money to the company to enable it to remain afloat. According to the Wall Street Journal, the company needs more than $3 billion to remain operational past next year.

Softbank to topple WeWork founder and take control of the company

Softbank, which owns a third of the company, is already prepping a takeover bid. They will invest more money in the form of debt and equity in WeWork. This could signify a potential change in voting rights as Softbank will now have a huge share, and they will be responsible for turning things around. The situation is still fluid, with no guarantees that the parties could reach a deal soon.

Softbank could acquire WeWork for less than $10 billion barely ten months after they valued the company at $47 billion at the beginning of the year. Part of the money Softbank will give will go into repaying Neumann’s loans.

Besides Softbank, the company was also considering JPMorgan for a debt package to bail it out. Insiders indicate that last week, WeWork executives were in JPMorgan’s headquarters in New York trying to broker a deal.