SoftBank looks for emergency funding to rescue WeWork

Most companies experience financial difficulties from time to time, especially in raising additional funds. This time, SoftBank Group Corp., one of the largest financial companies, has faced a financial strain. Recently, the company has held negotiations with three major Japanese banks in order to attract $3 billion rescue funds to support the WeWork company. In total, $9.5 billion is required for bailing out the co-working startup, SoftBank said. Reportedly, the bank holds a major stake in this American startup. Experts fear that in the coming year, the Japanese technology conglomerate will not be able to provide financial assistance to WeWork. Moreover, the biggest Japanese banks are concerned about the risks associated with saving the startup. Such major companies as Mizuho Financial Group Inc, Mitsubishi UFJ Financial Group Inc, and Sumitomo Mitsui Financial Group Inc are seeking to rescue WeWork at minimum risk. However, one option is to use some of SoftBank’s stake. Notably, SoftBank owns 26% of Alibaba, China's electronics giant. So, the bank can use these shares as collateral for a loan. It seems, though, that for some Japanese banks credit risks may outweigh the possible benefits of cooperating with SoftBank. This is the reason why the negotiations have reached a deadlock. So far, analysts cannot see the way out of this situation. The bank’s ever-growing debt and WeWork's extremely unstable position increase the financial losses that the company may incur.