WeWork Inc. (NYSE:WE) adopted a shareholder rights plan as it tries to preserve its tax assets.
WeWork (WE) adopted a stockholder rights plan designed to protect long-term stockholder value by preserving the availability of WeWork’s net operating loss carryforwards (“NOLs”), according to a statement.
The holder rights plan comes after the office-space sharing companyentered a pact with a group of bondholders, a third-party investor, and SoftBank’s (OTCPK:SFTBY) Vision Fund to boost its liquidity and reduce its debt last month.
As of December 31, WeWork (WE) had approximately $6.9 billion of U.S. federal NOLs and $6.6 billion of state NOLs that could be available to offset its future federal taxable income and state taxable income.
WeWork (WE) said its ability to use the NOLs would be “substantially” limited if it experienced an “ownership change.” The rights plan or “poison pill” goes into effect if a person or group acquires beneficial ownership of 4.9% or more of the company.
The Tax Asset Preservation Plan took effect on Friday and is scheduled to expire in a year.
On Monday WeWork (WE) announced that its subsidiaries – WeWork Companies and WW Co-Obligor – commenced separate offers to exchange any and all of the outstanding issuers’ 7.875% senior notes due 2025 and 5.00% senior notes due 2025.