Photo/Shetuwang

Sept. 3 (NBD) -- The ride-hailing giant Didi Chuxing's plan to buy Chinese leading bike-sharing brand Ofo has been delayed, a person familiar with the matter said to NBD.

Didi Chuxing started to invest in the bike-sharing platform since Ofo's B+ round financing in 2016. The giant was reported to acquire Ofo later in July this year. Moreover, Alibaba's Ant Financial was reportedly in talks with Didi Chuxing for a joint buyout of Ofo for a total of 1.4 billion U.S. dollars in early August. But no deal was finally reached so far.

The acquisition plan was approved by Didi Chuxing and Dai Wei, founder and CEO of Ofo, but was rejected by the Alibaba-backed company, the person told NBD. 

It is noted that the new negotiation hasn't restarted as a female passenger was raped and killed when using Didi Chuxing's carpool service.

An industry insider explained that Alibaba will not accept Didi Chuxing's plan to take over Ofo alone because the deal will lead to the escalation of competition between Didi Chuxing, which provides riding service through Qingju Bike, and Meituan Dianping, purchaser of the bike sharing firm Mobike. Didi Chuxing will also face great challenge if Alibaba, which operates Hellobike, succeeds to buy Ofo alone.

Moreover, the troubled bike-sharing platform now is also in debt.

Shanghai Phoenix Enterprise Group Co Ltd (600679.SH) announced Saturday its subsidiary has filed a lawsuit against Dongxia Datong (Beijing) Management and Consulting Co., Ltd. (Dongxia Datong), operator of Ofo.

The Group's statement said Dongxia Datong still owed its subsidiary 68.15 million yuan (9.97 million U.S. dollars) as of the date of litigation, which seriously breached the contract signed last year. 

On May 6 of 2017, the Group's subsidiary entered an agreement with Dongxia Datong, under which the ofo will purchase no less than 5 million bikes from the cycle subsidiary. The contract was predicted to bring profit of 40 million yuan (5.85 million U.S. dollars). 

However, the bicycle supplier only gained 637 million yuan (93.20 million U.S. dollars) in revenue from orders of 1.86 million bikes placed by Dongxia Datong and its affiliated company as of May 5 this year, about 37.23 percent of the planned number.

NBD noticed that in the first half of this year, Shanghai Phoenix generated 19.11 million yuan (2.80 million U.S. dollars) of net profit attributable to shareholders of the listed company, plunging 55.44 percent year over year.

Email: zhanglingxiao@nbd.com.cn