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WeWork India, a thriving affiliate of WeWork Inc., is engaged in discussions with its majority owner, the Embassy Group, regarding the buyback of the 27% stake held by WeWork Inc. This comes in the wake of WeWork Inc.'s filing for bankruptcy protection under Chapter 11 of the US Bankruptcy Code. The parent company rejected the initial buyback offer. WeWork India, valued at over $500 million in 2020, aims to achieve a revenue target of Rs 1,800 crore in FY24, showcasing resilience and growth despite the challenges faced by its global counterpart. WeWork India clarified its exclusion from the strategic reorganization process announced by WeWork Inc., emphasizing its independent operational status. WeWork Inc. declined WeWork India's proposition to repurchase its 27% stake, thereby initiating discussions between the Embassy Group (majority stake owner of WeWork India) and WeWork Inc. for a potential alternative resolution. The Embassy Group is optimistic about progressing talks with WeWork Inc., anticipating a buyback closure within the next one to two quarters. WeWork India, recognized as one of the company's fastest-growing affiliates outside the US, remains a profitable venture. In 2020, WeWork Inc. invested $100 million in WeWork India, acquiring a 27% stake and valuing the company at over $500 million. The infusion of funds aimed to strengthen WeWork India's market position and leadership in India's competitive co-working sector. SoftBank Group-backed WeWork Inc. filed for bankruptcy protection, a consequential move following unsuccessful investments in companies utilizing its office-sharing spaces. The bankruptcy filing revealed estimated assets and liabilities ranging from $10 billion to $50 billion, underscoring the significant financial challenges faced by WeWork Inc. Despite these global developments, WeWork India remains focused on growth, targeting a revenue of Rs 1,800 crore in FY24. The company reported robust financials for April-September 2023, with revenue reaching Rs 831 crore, reflecting a 40% YoY increase. EBITDA for the same period stood at Rs 532 crore, marking a substantial 90% YoY growth. WeWork India plans to expand its office space by adding 1.5 million to 2 million sq ft annually, operating across seven cities and 50 locations. The flexible office space sector, witnessing a resurgence in demand, is gaining ground as enterprises prioritize operational efficiencies through a distributed work model. Industry estimates indicate a significant expansion of office space leasing, with leasing increasing from 92,400 seats in FY22 to 139,000 seats across major cities in FY23. Notably, cities such as Bengaluru, Pune, and Delhi NCR witnessed prominent growth. WeWork India's resilience, financial growth, and strategic plans for expansion showcase its ability to navigate challenges independently of WeWork Inc.'s global situation. The ongoing discussions for a stake buyback underscore the Embassy Group's commitment to sustaining WeWork India's upward trajectory in India's dynamic co-working landscape.
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