Tuesday, January 21, 2014
Bixi Owes $50 Million, Files For Bankruptcy Protection
Interesting. Bicycles seem popular in North American cities lately. What happened in Montreal that caused financial issues?
Tue., January 21, 2014
Bixi has applied for protection from its creditors and the City of Montreal is taking over the local operation of the popular bike-sharing service, CBC News reported. Montreal Mayor Denis Coderre made the announcement Monday afternoon. “If Bixi can be saved, it’s through the Bankruptcy and Insolvency Act," Coderre said. The company that owns Bixi — the Public Bike System Company, known in French as the Société de vélos en libre-service (SVLS) — owes $50 million to various creditors, including the City of Montreal. Coderre said rather that sinking more money into the SVLS, a private company, the city would take over Bixi's Montreal assets. He said they are worth approximately $11 million. "Bixi is in bankruptcy. We have to admit that," said Projet Montreal Leader Richard Bergeron, who supported Coderre's decision to take over the service. In 2011, Montreal's city council approved a $108-million bailout package for the program to cover a budget shortfall. That included a $37-million loan to cover Bixi's deficit and another $71 million in loan guarantees to export and develop the system abroad.