OTTAWA — A businessman from Quebec has received a court’s approval to purchase the company that provides the bicycles and technology for several major bike-sharing systems, including Citi Bike in New York and Barclays Cycle Hire in London.
As part of a bankruptcy restructuring, on Friday a judge in Montreal allowed Bruno Rodi, the owner of a Canadian furniture company, to buy the Société de Vélo en Libre-Service, better known as Bixi. The purchase excludes the bike-sharing system in Montreal, the city where Bixi got its start as a project of the local parking authority.
While Bixi has been popular with riders, its ambitious global expansion proved to be a financial disaster. The company filed for bankruptcy in late January.
Mr. Rodi’s purchase will bring little relief to Bixi’s creditors, who are owed about $42 million. Mr. Rodi is paying a little more than $3.6 million for the company. In bankruptcy, Bixi attracted significant interest: Court documents show that six bids were submitted by the March 10 deadline, and a seventh arrived last week. Evidence heard in court on Friday indicated that REQX Ventures, whose parent company is the New York-based real estate developer and fitness club owner the Related Companies, made a $5 million bid on Thursday. But Judge Martin Castonguay of the Quebec Superior Court declined to review any offer made after the deadline.
Exactly why Mr. Rodi, who is also active in real estate, wants to get into the bike-sharing business is not clear. Mr. Rodi once cycled a 2,130-mile route modeled after the Tour de France in 21 days. His company did not respond to requests for comment.
Although Bixi is now more stable, some financial uncertainty hangs over a related entity, Alta Bicycle Share, which sells Bixi systems in the United States and operates several American bike share systems, including the one in New York. Last month, Alta said it was trying to secure about $20 million from investors to enlarge the New York system to 10,000 bikes and 600 stations, from 6,000 bikes and 330 stations.
“Given its plans to expand current systems as well as to launch new systems, Alta is looking forward to meeting with the new owners and discussing the path moving forward,” the company said in a statement.
Though the New York program, which made its debut last May, has attracted more than 100,000 annual members, it has drawn far fewer daily riders than expected. Heavy use by regular riders has led to higher-than-expected maintenance costs, and the operators have struggled to keep stations stocked with bikes.