{"id":206171,"date":"2025-06-22T22:32:13","date_gmt":"2025-06-22T22:32:13","guid":{"rendered":"https:\/\/www.europesays.com\/uk\/206171\/"},"modified":"2025-06-22T22:32:13","modified_gmt":"2025-06-22T22:32:13","slug":"canadian-export-agency-hit-by-350mn-loss-on-loans-to-thames-water","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/uk\/206171\/","title":{"rendered":"Canadian export agency hit by \u00a3350mn loss on loans to Thames Water"},"content":{"rendered":"

Unlock the Editor\u2019s Digest for free<\/p>\n

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.<\/p>\n

Canada\u2019s state-backed export agency has lost about \u00a3350mn on loans to Thames Water, the crisis-stricken UK utility that is teetering on the verge of renationalisation.<\/p>\n

Export Development Canada, which was established to help Canadian companies do business overseas, disclosed the losses, equivalent to more than half the money it lent to Thames Water, in its annual report and filings to the US Securities and Exchange Commission last week.<\/p>\n

The revelations follow a Financial Times report<\/a> last year that the body had sold loans it had made to Thames Water at deep discounts as the crisis at the utility deepened.<\/p>\n

Thames Water\u2019s troubles are a blow for Canadian institutions, among the most important investors in UK infrastructure. The $250bn British Columbia Investment Management Corporation owns 8.7 per cent of Thames Water, which provides water and sewage services to about 16mn customers.<\/p>\n

The Ottawa-based export agency originally lent to the utility in 2018 to support an investment by the Ontario Municipal Employees Retirement System, Thames Water\u2019s largest shareholder. EDC said this month that it had eventually provided a total CAD$1.1bn [about \u00a3600mn].<\/p>\n

Omers, one of Canada\u2019s largest public sector pension funds, disclosed last May that it would write the value of its 31 per cent stake in Thames Water down to zero after major shareholders in the utility, including the Abu Dhabi sovereign wealth fund, said it was \u201cuninvestable\u201d.\u00a0<\/p>\n

Prompted by Omers\u2019s decision to write off its stake, EDC then sold \u00a3313mn of top-ranking class A debt, and more than \u00a3300mn of riskier class B loans, resulting in the agency losing about \u00a3350mn. The class B debt was quoted at prices as low as 27 pence on the pound in the weeks following the sale. <\/p>\n

Recommended<\/p>\n

\"Thames<\/a><\/p>\n

In its SEC filings, EDC said it had sold the loans due to \u201cdeteriorating business and financial conditions, combined with the fact that the Canadian entity that we were supporting had exited the investment\u201d. <\/p>\n

\u201cAs a financial institution that undertakes thousands of transactions a year, we understand that losses can and do occur; it\u2019s part of the reality of doing business,\u201d the agency said in a statement to the Financial Times. <\/p>\n

EDC said it had a \u201csolid capital base, a strong record of profitability\u201d and regularly paid dividends to Canada\u2019s government, and had also \u201cfacilitated more than 30 introductions for Canadian companies to Thames Water\u201d.<\/p>\n

The future of Thames Water \u2014 which is struggling under a \u00a320bn debt mountain \u2014 is in the balance after US private equity firm KKR <\/a>this month withdrew a proposal to acquire a stake and inject \u00a34bn.<\/p>\n

Royal Bank of Canada has joined the group of senior class A lenders \u2014 including US hedge funds Elliott Management and Silver Point \u2014 that has been allowed to extend \u00a33bn of expensive emergency financing to Thames. The lenders may end up owning the utility if their equity bid is successful.<\/p>\n

UK environment secretary Steve Reed this week<\/a> said he had \u201cstepped up\u201d preparations to put Thames Water into special administration \u2014 a form of temporary renationalisation \u2014 if a lack of suitable private sector bids made it necessary.<\/p>\n","protected":false},"excerpt":{"rendered":"Unlock the Editor\u2019s Digest for free Roula Khalaf, Editor of the FT, selects her favourite stories in this…\n","protected":false},"author":2,"featured_media":206172,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3090],"tags":[51,1700,16,15],"class_list":{"0":"post-206171","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-uk","11":"tag-united-kingdom"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@uk\/114729395478235590","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/206171","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/comments?post=206171"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/posts\/206171\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media\/206172"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/media?parent=206171"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/categories?post=206171"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/uk\/wp-json\/wp\/v2\/tags?post=206171"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}