Chinese bike-sharing startup Ofo, backed by Alibaba, has “immense” cash flow problems and has considered applying for bankruptcy, the Financial Times reported on Wednesday.
Source: Straits Times / Reuters
The reporting is based on a letter that Ofo founder and CEO Dai Wei sent to employees.
“I’ve thought countless times […] of even dissolving the company and applying for bankruptcy,” Dai wrote. “For the whole of this year we’ve borne immense cash flow pressure. Returning deposits to users, paying debts to suppliers, in order to keep the company running we have to turn every renminbi into three.”
This week has seen panicked Ofo users demand refunds on their deposits. At time of publishing, close to 12 million people are in the refund queue, up from 8 million yesterday.
Editing by Eileen C. Ang
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