The government agency responsible for helping Canadian exporters find new markets has loaned $265 million to a giant Spanish telecom to buy BlackBerrys.
Export Development Canada (EDC), which provides taxpayer-backed loans to companies around the world to make it easier for those companies to buy Canadian products, announced the 200-million-euro “working capital facility,” or short-term loan, to Spain’s Telefonica in a statement issued last week.
According to the U.K.’s Guardian, the EDC issued the loan because, like many Spanish firms of late, Telefonica has been experiencing financial problems.
"There appears to be a need for financing for [Telefonica] at this time," the EDC said, as quoted at The Guardian. The loan "just makes the purchase [of phones and services] and related lending easier, quicker and more efficient for all parties.”
Formerly Spain’s state-run monopoly phone company, Telefonica is now the world’s fifth-largest mobile network operator, with a presence in 24 countries. Its 2011 revenue was estimated at C$82 billion.
But Spain’s recent economic problems have taken a bite out of Telefonica’s profitability. Its latest quarterly earnings report showed profit shrinking by 82 per cent, with weak operations in Europe offset partly by stronger operations in Latin America.
Yet the company’s financial problems don’t appear too closely linked to the financial aid it is receiving from Canada. According to Tech Week Europe, the latest loan is “part of an ongoing relationship with Telefonica that has seen the agency provide the Spanish operator with financing for Canadian procurements since 2006.”
The news comes as BlackBerry launches pre-sales of its next smartphone model, the BlackBerry Q10, in the U.K. Many loyal BlackBerry fans are eagerly awaiting the Q10 because it is the company’s next-generation smartphone to feature a QWERTY keyboard.
No Canadian date has been set for Q10 sales, but analysts expect it to be around the same time as it goes on sale in the U.K., towards the end of April, the Canadian Press reported.
The BlackBerry Z10, which debuted earlier this year, features a full-size screen, like the iPhone and Samsung phones, eschewing the signature BlackBerry keyboard.
The EDC says it facilitated information-technology trade between Canada and other countries to the tune of $8.4 billion in 2012 thanks to its loans. In all, more than 1,000 companies took advantage of the EDC’s programs and loans.
Also on HuffPost