Ontario Sells Another $2 Billion in Hydro One SharesKristine Owram and Maciej Onoszko
Hydro One offering reduces Ontario stake to below 50%
Utility’s shares sold at slight discount to market price
Ontario is selling another chunk of Hydro One Ltd. to investors, offering C$2.79 billion ($2 billion) worth of shares to reduce its stake in the utility to less than half.
Canada’s most-populous province will retain a 49.9 percent stake in the Toronto-based company after the sale of 120 million common shares at C$23.25 apiece. The offering is made through a group of banks led by RBC Capital Markets and CIBC Capital Markets, according to a statement Monday. The sale price is a 3.2 percent discount to Monday’s close of C$24.03.
The provincial government raised C$1.66 billion by selling a 13.6 percent stake of Hydro One through an initial public offering in 2015, the country’s largest since 2000. It boosted proceeds by another C$1.71 billion when it sold a further chunk of the company in April 2016.
Premier Kathleen Wynne said before the IPO that she aimed to sell as much as 60 percent of the company over four to five years to raise funds for debt repayment and infrastructure.
Ontario -- the world’s most indebted sub-sovereign according to Moody’s Investors Service -- is due to hold elections next year.
Ontario has given the bankers an option to buy an additional 12 million additional shares. If this option is filled, the total gross proceeds would increase to C$3.07 billion, reducing the province’s stake in the transmission and distribution company to almost 48 percent. The province said in a separate statement that this offering “concludes” its sales of Hydro One shares.
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