Chinese bike-sharer Ofo tottering on the edge of bankruptcyBusiness | 20 Dec 2018 4:28 pm
Chinese bike-sharing startup Ofo, backed by Alibaba Group Holding, is battling "immense” cash flow problems and disbanding the firm has been considered as an option, its chief executive said in a letter to employees.
The firm, whose yellow-hued bicycles litter city streets around China, has been hit by a costly battle with main rival Mobike, owned by Meituan Dianping (3690), that has eroded its ability to make payments to suppliers, Reuters reports.
"The whole of this year we’ve borne immense cash flow pressures. Returning deposits to users, paying debts to suppliers and keeping operations running,” Dai Wei said in the letter posted on social media by Ofo’s head of public relations.
"It has meant turning every renminbi into three,” the chief executive said. Dai added that he had thought "countless times” about ways to resolve the issues, "even of dissolving the company and applying for bankruptcy.''
Ofo and Alibaba were not available for comment.
Dai, also Ofo’s founder, added he was determined to keep the company afloat. "As pressures mount we must endure, as difficulties grow we must find ways to overcome them,” he said in the letter dated December 19.