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Wednesday, February 19, 2014

Alta Bicycle Share Seriously Considered Purchasing its Now-Bankrupt Supplier

Posted by Dirk VanderHart on Wed, Feb 19, 2014 at 2:14 PM

Earlier this month, Portland's Alta Bicycle Share announced it will be able to forge on with new bike share systems without its longtime supplier, the now-bankrupt Public Bike System Company (PBSC).

That's hopeful news, it seems, for Portland, since Alta's new agreement with PBSC's chief rival—Montreal-based 8D Technologies—makes it at least possible we'll see a bike share system launch this year as officials have promised.

What Alta didn't mention, and declined to answer questions on, is that it had looked seriously into purchasing the flagging PBSC (nicknamed Bixi) just a couple of months ago. According to a report today from the Montreal Gazette, Alta pulled out after it became clear the company was in far too great a hole. From the story:

Then, in December, Alta Bicycle Share offered to buy the company in a deal under which it would have taken on all of Bixi's debts, Massi said.

At last count, Bixi's debt was $46 million.

That Alta deal fell through because Bixi asked Alta to prove it had the financial capacity to pay, and Alta never produced the proof, Massi said.

Alta said it backed out after taking a closer look at Bixi's books.

PBSC supplied Alta with the docking stations and rental kiosks it used for bike share systems in places like Chicago and New York. So its bankruptcy filing on January 20 raised questions about how Portland will be able to launch bike share this year—a planned rollout already a year behind initial promises.

Alta's partnership with 8D seemed to answer at least some of those questions. The companies say an improved bike share system will be ready for purchase this summer. It's still unclear, though, how its cost will compare to PBSC's product, and that could further complicate Alta's attempts to get millions in sponsorship money to pay for the program.

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