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Cash-Strapped Bike-Sharing App Ofo Says It “Hasn’t Given Up”

By Simin Wen / Oct 15, 2019 06:24 PM / Business & Tech

Photo: VCG

Photo: VCG

Beleaguered bike-sharing company Ofo is saying reports detailing some of its financial difficulties aren’t true. The company that was once a powerhouse but has been relegated to also-ran in China’s competitive shared bike business has issued a rare public statement refuting online rumors that it had borrowed more than 1.7 billion yuan ($240 million) in a bid to kick-start its moribund business.

An article published Monday on a little-known WeChat public account claimed that in February last year Ofo mortgaged nearly 45 million bicycles in return for a 500 million yuan loan from Ant Financial-affiliated investment firm Shanghai Yunxin Venture Capital Management. The report said Ofo later made a similar arrangement involving an unspecified number of bicycles with Alibaba-backed Zhejiang Tmall Technology in return for a further 1.27 billion yuan loan.

The buzz that followed prompted Ofo to issue its rare statement saying the article “contained large amounts of false information,” without giving further details.

The statement also referred to longstanding cash flow issues that have left an estimated 10 million of Ofo’s former users waiting to reclaim their initial 99 yuan deposits. “For nearly a year, Ofo has been in well-known difficulties, but it has not given up,” the statement said. “At present, we are making every attempt to resolve historical deposit problems and to continue to meet users’ bike-use needs as much as possible.”

Once-highflying Ofo has languished since last year when declining funds prompted a flood of user requests for deposit refunds.

The company has deployed a number of strategies in response, from implementing deposit-free services in Shanghai to rolling out a fixed-parking bike-sharing model in part of Beijing.

Related: Frustrated Shared-Bike Riders Go to Ofo in Search of Refunds

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