TEHRAN, December 20 -Chinese bike-sharing startup Ofo, backed by Alibaba Group Holding Ltd (BABA.N), 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.
TEHRAN, Young Journalists Club (YJC) -Chinese bike-sharing startup Ofo, backed by Alibaba Group Holding Ltd (BABA.N), 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.HK), that has eroded its ability to make payments to suppliers.
In the past week, millions of users, uncertain about Ofo’s future, have also applied for a return of the deposits they had paid to use the platform, adding to the firm’s financial woes.
“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 CEO said, referring the China’s currency. 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 on Thursday.
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 Dec. 19.
Source:Reuters
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