Ontario is concluding its initiative to broaden the ownership of Hydro One, and will dedicate the net proceeds towards the largest investment in public infrastructure in the province's history.
The Province offered 120,000,000 common shares at $23.25 per share for total gross proceeds of approximately $2.8 billion, in this offering. The Province also granted an over-allotment option to the underwriters to purchase up to an additional 12,000,000 common shares, which if exercised in full, would result in total gross proceeds of approximately $3.1 billion.
With the completion of this transaction, the Province will have exceeded its objective to raise $9 billion in gross proceeds and other revenue benefits from broadening the ownership of Hydro One.
As a result, the Province will have completed this initiative and does not anticipate any further offerings of Hydro One shares by the Province, other than sales for the collective benefit of Indigenous communities resulting from previously disclosed discussions.
The Province will remain the largest shareholder in Hydro One and is prohibited by law from reducing its ownership below 40 per cent. By law, no other shareholder or group of shareholders is permitted to own more than 10 per cent of the company.
By leveraging the value of Hydro One shares, the government is investing in priority transit and transportation projects that will help people in their everyday lives, including GO Regional Express Rail, light rail transit, improvements to roads and bridges and natural gas network expansion in rural and northern communities. These projects are also creating jobs and strengthening the economy, with data showing every $1 spent on public infrastructure increases GDP by $1.43 in the short term and by up to $3.83 in the long term.
Maximizing the value of provincial assets is part of our plan to create jobs, grow our economy and help people in their everyday lives.
- Ontario is investing more than $190 billion in public infrastructure over 13 years starting in 2014-15, for priority projects such as roads, bridges, public transit, hospitals and schools.
- A sale of shares by an existing shareholder is typically described as a secondary offering.
- The per-share offering price of $23.25 is approximately 13 per cent higher than the offering price in the November 2015 Initial Public Offering.
- Hydro One rates will continue to be set by the independent regulator, the Ontario Energy Board.
"With the completion of this transaction, the government will have surpassed our financial targets and raised billions for transit, transportation and other priority infrastructure projects and as a result, we do not anticipate any further offerings of Hydro One shares owned by the Province. Over the last two years, the new leadership at Hydro One has demonstrated its commitment to improved performance and customer service excellence. Since the Government of Ontario will remain the single largest shareholder, Ontarians will continue to see ongoing value from our ownership stake for years to come."
Minister of Energy