BIXI Toronto: A Failing Business

Update: see previous posts –  August 19, 2012 BIXI Toronto – Fails Green Test and Violates Muncipal By-laws Governed by the Highway Traffic Act, August 9, 2012 Art of Bicycle Maintenance Puts Young Workers on a New Path, January 23, 2012 Bixi – Coldest Day of the Year Bike Ride On Monday, Jan. 30/12 from Toronto City Hall to Royal York Hotel on Front St  , August 28, 2011 BIXI Toronto – Wants to Expand in Toronto, While Charging Torontonians $17 More and Provides 15 Minutes, Less June 26, 2011 Bixie – When Will BIXI Give Torontonians the Same Deal They Give to Montrealers?, May 11, 2011 Bixi – Car Crashes Into Bike Rack at Bay & Queen Street Bixi Station , May 6, 2011 BIXI Quebec Already Lays Off Employees, May 4, 2011 Bixi Charges $17 More in Toronto and Gives 15 Minutes Less Free Time than Montreal, May 2, 2011 Bixi, April 30, 2011 Bixi – Toronto (Arriving Soon)

A report from city staff says that the company that runs Toronto's public bicycle program is suffering financial difficulties.
A report from city staff says that the company that runs Toronto’s public bicycle program is suffering financial difficulties.

see source

BIXI’s international operations now up for sale, it’s unclear who will pay off the $32.25 million BIXI still owes on the $37-million loan that The City of Montreal provided and how they will pay The City of Toronto their debt obligations.

The company that operates Toronto’s public bicycle program is having “financial difficulties” that have been brought to the attention of the city’s executive committee.

Coun. Denzil Minnan-Wong told reporters Tuesday that BIXI Toronto Inc., is having trouble meeting its debt obligations.

“My understanding is that we gave them a loan guarantee and they’re borrowing money. but they can’t make the payments on the loan, and that’s a significant obstacle to them at the current time,” Minnan-Wong said.

A report from city staff says the company’s debt load is “unsupportable” and it had cash-flow issues during the winter months.

Toronto provided a guarantee for a 10-year loan to BIXI of up to $4.8 million, so that the company could pay for the bicycles and stations that have been set up around the city’s downtown core.

BIXI would eventually borrow $4.5 million, and according to the staff report, its loan balance stood at $3.9 million at the end of December.

In an effort to protect the city from any financial impact, staff have prepared confidential advice on the options the city may pursue toward revising its agreement with BIXI.

The executive committee will consider that advice at a meeting later this month.

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