SoftBank Group on Wednesday confirmed it would pump billions more dollars into struggling start-up WeWork, in a deal that increases its stake in the office-sharing firm to around 80 percent.

File photo: VCG

The Japanese group will commit to $5 billion in new financing, and will launch a tender offer of up to $3 billion for existing shareholders, it said in a statement. It will also speed up an existing plan to add another $1.5 billion.

The deal will see co-founder Adam Neumann exit the board, with Marcelo Claure of SoftBank Group Corp. taking over as executive chairman of the board

Neumann will retain "observer" status on the board.

A source told AFP that the deal pays Neumann $1 billion for his SoftBank shares, $500 million for reimbursements of personal debts and $185 million in consulting fees.

Neumann will maintain a small stake in the company, the source added.

The agreement will leave SoftBank Group with an ownership stake of "approximately 80 percent," but the firm said it would not hold a majority of voting rights at any general stockholder meeting or board of directors meeting and "does not control the company."

"WeWork will not be subsidiary of SoftBank. WeWork will be an associate of SoftBank," the statement said.

The plan provides much-needed funds for the troubled company, which sources have said must raise at least $3 billion to cover its financing needs through the end of the year.

It caps a turbulent period that saw Neumann step down as chief executive in September amid questions over perceived self-dealing between his personal assets and WeWork, and over unconventional personal conduct, including drug use.

The company in late September cancelled a plan to go public amid questions over its profitability prospects for the long run, an outcome that some analysts applauded as a commendable weeding-out of overvalued entities in public markets.