Canada’s government-backed export credit agency is reportedly facing heavy losses after lending hundreds of millions of pounds to debt-ridden Thames Water.

The British energy utility, which has announced it could run out of cash by June next year, received two loans from Export Development Canada (EDC) in 2018 and 2019 at the behest of Canadian pension fund Omers.

According to the Financial Times, which cited unnamed investors, EDC sold the loans at a significant discount in recent weeks.

Thames Water has been on the brink of collapse in recent months, struggling under the weight of debts accumulated over the years by its various owners. If the company fails to find new financing within the next ten months, it could be placed into receivership.

The company’s troubles have caused uproar in the global financial world, with Canadian investors hit particularly hard. Omers, a pension fund for Ontario public sector employees, wrote down the value of its 31 percent stake to zero in May.

Thames was forced to accept oversight from an independent auditor after the company lost its investment grade rating – a breach of its licensing conditions.

Britain’s largest water company, which supplies water and sewage to 16 million customers in London and the Thames Valley, has faced sustained criticism over leaking pipes, discharging sewage into rivers and paying dividends to former shareholders through its opaque financial structure.

EDC was founded in 1944 as a government-owned company tasked with helping Canadian companies export. Documents posted on the company’s website show that as of March 22, 2018, it provided between C$100 million and C$250 million (between £56 million and £141 million) in financing to “support Canadian direct investment abroad.” The same documents show financing between C$250 million and C$500 million a year later.

In both cases, the money went to Thames Water Utilities Ltd, the water utility’s regulated subsidiary. The Canadian company involved is named as Omers Infrastructure.

The FT reported, citing investors, that EDC had disposed of loans worth over £600 million in the past two months, with one of the transactions coinciding with the date of the Thames Water financing.

In a statement to the FT, EDC said: “We have been closely following the recent challenges faced by the utility and are evaluating the best course of action to manage our credit risk on the company in light of the regulator’s recent decision and Omers’ decision to write down its stake.”

“As part of the careful management of our financing portfolio, we have put processes in place to manage these situations and minimize the impact on EDC.”

The company said it would not speculate on specific debt sales.

EDC was approached for comment. Thames Water declined to comment.