European bank funding BC P3s may be broken up by new owners
Dexia, the Belgian-French bank that's involved in several public-private partnership schemes in British Columbia, may be broken up by the governments who bailed it out.
The bank is providing financing for the Royal Jubilee Hospital expansion in Victoria, a new Surrey outpatient hospital, and the Golden Ears Bridge linking Maple Ridge to Surrey.
In the wake of September's credit crunch, Dexia received a bailout worth $11.3 billion from a number of European governments.
A media report today suggests that the state-owned French bank that took part in the bailout is considering carving out Dexia's French operations and merging them with the postal service.
Dexia has faced a number of problems recently.
Earlier this month, it was reported that the bank may be exposed in the Bernard Madofff alleged fraud scandal to the tune of $115 million (US),
And Dexia's inability to raise capital due to the world-wide shortage of credit forced the British government to bailout a major highway project near Carlisle.
Despite the crisis facing P3 lenders like Dexia, Depfa and other banks, the B.C. government agency reponsible for managing P3 schemes insists that taxpayers will not have to bailout projects like the Royal Jubillee Hospital expansion.
Nobody wants to be the Christmas turkey, but after a state-backed rescue earlier this year a carve-up could be in store for Belgo-French bank Dexia.
According to a report in French daily Les Echos published on Friday, France's state-owned lender La Caisse des Depots is backing a takeover of Dexia's French activities. The lender threw Dexia (other-otc: DXBGF - news - people ) a 2 billion-euro ($2.8 billion) lifeline at the end of September, as part of a 6.4 billion-euro ($9.0 billion) rescue package backed by the governments of France, Belgium and Luxembourg, and is reportedly considering merging the bank's French operations with France's state-owned postal bank, Banque Postale, to solve its funding difficulties.