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Dec. 12 (NBD) -- China's bike-sharing firm Mobike is planning to spin off its European unit, Financial Times reported.

A person familiar with Mobike's new plan said Meituan Dianping, which fully owns the bike-sharing platform, will maintain a stake in Mobike's European subsidiary and will not divest all of Mobike Europe.

Mobike is negotiating with potential investors to make the European unit a separate entity, the person added.

On April 4 this year, the food delivery giant acquired Mobike including its international arms for 2.7 billion U.S. dollars and agreed to pay 1-billion-U.S. dollar debt for the bike-sharing app.

Meituan Dianping made its debut in Hong Kong stock market in September, with its valuation hitting 48.28 billion U.S. dollars.

Mobike reported a gross loss of 407 million yuan (58.9 million U.S. dollars) from April 4 to April 30, according to Meituan Dianping's prospectus.

As a result of the efforts to streamline Mobike business, gross loss of this segment narrowed in the three months ended September 30, Meituan Dianping's latest financial report shows.

The bike-sharing start-up currently operates 200,000 bicycles in 23 European cities, including London, Paris, Madrid, Milan and Rotterdam, claiming 48.1 million registered users.

Mobike is facing serious challenges in business expansion in the European market.

It suffered from vandalism in some cities including Manchester, where it withdrew in September this year.

Besides, the company is under investigation from regulators in Germany, suspected of breaching Europe's data law.

Regulator's concern is that bike-sharing and car-sharing platforms are gathering large amounts of data from users through mobile apps, including accurate location data even when users are not using their services.

In a statement to the Financial Times, a spokesman said, "The Berlin commissioner for data protection and freedom of information had already planned to launch an investigation into car- and bike-sharing companies...It is planned to request a written response from Mobike in the coming week and to request answers to a catalogue of questions."

Under the rules of the General Data Protection Regulation (GDPR), which came into effect on May 25, 2018, Mobike could face a fine of either 20 million euros (227.8 million U.S. dollars) or 4 percent of its global revenue.

In response to the probe, Mobike stated on Wednesday it has not been notified by regulatory authorities yet, but will work with relevant authorities actively.

Mobike's announcement noted that it has attached great importance to user data protection since its establishment in 2016, thus data protection is one of the priorities. The company strictly complies with GDPR and the industry standards in Europe and it took actions in 2017 to ensure the security of user information, Mobike stated.


Email: zhanglingxiao@nbd.com.cn

Editor: Zhang Lingxiao