British Columbia P3 Lender Has Exposure in Madoff Scandal

by mike_yvr | December 16, 2008 at 08:14 am

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Dexia, the Belgian-French bank that's backing a number of the B.C. Liberal government's public-private partnership (P3) schemes to build bridges and hospitals, has admitted that it could face serious losses as a result of the Madoff fraud case.

Franco-Belgian lender Dexia said its indirect exposure to Wall Street money manager Bernard Madoff's fraud could trigger an after-tax loss of around 85 million euros ($115 million).

Dexia said this was the amount it would lose if the value of Madoff Investment Securities, the firm at the center of what prosecutors say was a $50 billion scheme to defraud investors, was nil.

Dexia is providing capital for the construction of at least three major P3 schemes in British Columbia: the Golden Ears Bridge project; the expansion of Royal Jubilee Hospital in Victoria; and a new outpatient health facility in Surrey.

In the wake of September's credit crash, Dexia received a $11.3 billion bailout from a number of European governments.

Last week, a British newspaper reported that Dexia was unable to raise cash for a major highway project in the U.K. forcing the national government to bailout the project with a short-term cash infusion.

There are a number of posts here at NowPublic on Dexia's recent problems.