The secondary share offering of Hydro One has now been completed, generating approximately $2 billion in gross proceeds that will now be dedicated to critical investments in transit and infrastructure throughout Ontario and pay down debt.
On April 5, the Province sold 72,434,800 common shares at $23.65 per share, generating $1.7 billion in gross proceeds. The Province granted an over-allotment option to the underwriters to purchase up to an additional 10,865,200 common shares. The underwriters have elected to exercise this over-allotment option in full. The over-allotment shares were offered on the same terms and conditions as the base offering. Approximately 53 per cent of the offered Hydro One common shares were sold to retail investors, reflecting a strong demand by individual retail investors across the province.
The government continues to hold approximately 70 per cent of Hydro One and will proceed with future offerings in a careful, staged, and prudent manner, over time reducing Ontario’s stake to 40 per cent while remaining the largest shareholder.
Ontario remains on track to generate approximately $9 billion in gross proceeds and other revenue benefits. This includes $4 billion in net revenue gains that will be invested in infrastructure and $5 billion to reduce debt. As an example, assuming a long-term interest rate of 3 per cent, $5 billion in reduced debt would provide annual interest savings of about $150 million.
Net revenue gains from the Province’s sale of Hydro One common shares will be dedicated to the Trillium Trust to help fund infrastructure projects that will create jobs and strengthen the economy. These net revenue gains will help fund priority projects such as GO Transit Regional Express Rail, Light Rail Transit projects in communities across Ontario through the Moving Ontario Forward initiative, and natural gas network expansion in rural and northern communities.
Maximizing the value of provincial assets is part of the government’s economic plan to build Ontario up and deliver on its number-one priority to grow the economy and create jobs. The four-part plan includes investing in talent and skills, including helping more people get and create the jobs of the future by expanding access to high-quality college and university education. The plan is making the largest investment in public infrastructure in Ontario’s history and investing in a low-carbon economy driven by innovative, high-growth, export-oriented businesses. The plan is also helping working Ontarians achieve a more secure retirement. – CINEWS