The WeWork fiasco might cost SoftBank a $2.8 billion loan from Japan's biggest banks - Business Insider

WeWork might be costing the Japanese conglomerate nearly $2.8 billion worth of loans.Nikkei Asian Review, citing people familiar, said that two of Japan's biggest banks are considering turning down loan requests to SoftBank if the money is being used to prop up WeWork. SoftBank often went to these banks for funding to fuel the $100 billion Vision Fund, according to the Financial Times, but now because of WeWork, those banks are wary.View Business Insider's homepage for more stories. WeWork might be costing SoftBank nearly $2.8 billion worth of loans.Nikkei Asian Review, citing people familiar, said that Japan's biggest banks, Mitsubishi UFJ Financial Group (MUFG) and Sumitomo Mitsui Financial Group (SMFG), are considering turning down loan requests to SoftBank if the money is being used to prop up WeWork. Another Japanese lender, Mizuho, is leading discussions on a joint financing agreement for SoftBank worth about 300 billion yen ($2.76 billion), Nikkei said, adding that while Mizuho is open to lending the money, the other two banks are having second thoughts. “They are calling for retrenchment and asset sales to turn around the money-losing office sharer, on which SoftBank CEO Masayoshi Son has bet billions of dollars,” Nikkei wrote, citing the sources. According to the Financial Times, SoftBank often went to the three banks for funding, and is now “one of the most lucrative fee payers for the banking industry,” due to to the $100 billion Vision Fund. Because of the performance of both WeWork and to a lesser extent Uber, investors at the banks are getting worried about their levels of exposure to SoftBank. One banker close to SoftBank told the FT that since investing in WeWork there's been “a definite change in mood,” while another at Mizuho told Nikkei that “we cannot keep increasing loans forever.” This comes as SoftBank reported a massive $6.5 billion loss in the third quarter and amid the Japanese company's $9.5 billion debt rescue package for WeWork. According to Fast Company, Masayoshi Son wants WeWork to turn profitable by 2021 despite WeWork itself losing 80% in value in the last quarter.SoftBank isn't desperate for the money, with the FT saying it has $19 billion in cash so can still fund the bailout package. WeWork's layoffs will also start this week, according to an email sent by Executive Chairman Marcelo Claure, numbering around 4000 people. MUFG, Mizuho and SMFG all declined to comment to the FT, while SoftBank did not immediately respond to comment from Business Insider.