CCI Clears All Decks For Exit Of WeWork Inc From Indian Unit

SUMMARY

In an order issued on June 18, the competition watchdog approved WeWork Inc’s proposal to sell its stake in WeWork India to certain investors

In April, it was reported that the US-based troubled coworking major was mulling selling its remaining 27% stake in its Indian unit via an INR 1,200 Cr secondary transaction

WeWork India clocked a 68% YoY jump in revenue to INR 1,300 Cr in FY23 as losses narrowed 80% YoY to INR 146 Cr during the same period

The Competition Commission of India (CCI) has cleared all decks for the exit of US-based WeWork Inc from its Indian unit.

In a circular issued on Tuesday (June 18), the competition watchdog approved WeWork Inc’s proposal to sell its stake in WeWork India to certain investors.

“Commission approves the acquisition of (i) certain share capital of WeWork India by Real Trustee Advisory Company… (in its capacity as trustee for Volrado Venture Partners Fund II (Volrado II); and (ii) Volrado Venture Partners Fund III… and other independent co-acquirers; and (ii) 100% share capital of 1 Ariel Way Tenant (OAW) by Embassy Buildcon,” said the order.

For the uninitiated, Bengaluru-based real estate company Embassy Group holds a 73% stake in WeWork India while WeWork owns the remaining 27%. Additionally, it is also pertinent to note that OAW holds the shares on behalf of WeWork International.

In April, it was reported that the US-based troubled coworking major was mulling selling its remaining 27% stake in its Indian unit via an INR 1,200 Cr secondary transaction. At the time, it was said that Enam group’s family office, investment firm A91 Partners and CaratLane founder Mithun Sacheti would buy the stake from WeWork Inc.

The CCI order noted that the deal would proceed in two-steps. As per Economic Times, the two-step deal will see WeWork Inc and Embassy Group together sell nearly 40% stake in the local coworking unit.

The order comes seven months after SoftBank-backed WeWork Inc filed for Chapter 11 bankruptcy in November 2023.

Unlike its US counterpart, the coworking platform continues to thrive in India and reportedly clocked a 68% year-on-year (YoY) jump in revenue to INR 1,300 Cr in the financial year 2022-23 (FY23). Alongside, losses narrowed 80% YoY to INR 146 Cr during the same period.

Since its foray into the country, WeWork India has raised about INR 2,000 Cr in funding across multiple rounds. It offers flexible on-demand workspaces for startups, employees at its multiple locations across the country.

As per a report, the coworking startup earmarked an INR 400 Cr annual capital expenditure plan for “significant” expansion in major cities. The company plans to add close to 2 Mn sq ft of office space annually in the top seven to eight cities every year

That said, the coworking space in India has been witnessing a healthy uptick on the back of post-pandemic revival in demand. The development also comes at a time when WeWork India’s competitor has gone on to list on the bourses. With an oversubscription rate of 108X during its public issue, Awfis debuted on the BSE at INR 432.25 per share, a premium of 12.8% than the issue price of INR 383.

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