- Province to sell 15 million shares to aboriginal groups
- Shares sold for C$18 apiece, 32% discount to Monday close
The Ontario government agreed to sell part of its stake in utility Hydro One Ltd. as it seeks a stronger relationship with aboriginal communities in the province.
The government will provide a 25-year loan of as much as C$268 million ($206 million) to indigenous groups participating in the pact. The groups will have the option to buy up to 15 million shares or 2.5 percent of the current outstanding shares, for C$18 each. That’s a 32 percent discount to the C$26.37 closing price for Hydro One on Monday. The agreement is open to all first nations communities in Ontario and a minimum threshold of 80 percent participation by the end of 2017 is required for the deal to proceed, according to a statement on Tuesday.
Politicians and energy executives are increasingly seeking to include aboriginal communities as partners in resource project development to quell opposition and help improve relationships after historic abuses by governments. Enbridge Inc., for example, has sought and secured some aboriginal ownership for its Northern Gateway oil pipeline proposal. Ontario, which will remain the largest shareholder of Hydro One after the deal, has been selling down its stake in the Toronto-based utility since an initial public offering last year.
“Meaningful first nations’ participation in the energy sector is a priority for the province and enables economic development opportunities with first nation communities across Ontario,” Glenn Thibeault, Ontario’s minister of energy, said in the statement. “This new agreement-in-principle is transformational and unprecedented, and reflects the spirit of the political accord in strengthening Ontario’s relationship with first nations.”
Hydro One shares fell 19 cents to C$26.18 at 11:24 a.m. in Toronto. The stock, 70 percent owned by the Ontario government, is up 17 percent this year.