The province expects the sale to be final tranche of shares available in the utility's partial privatization. It will own less than half of Hydro One after the bought-deal, which one critic called "a slap in the face"
TORONTO—The Ontario government is selling what it expects to be its final offering of shares in Hydro One, a move it says could raise more than $3 billion for the province.
The government and Hydro One say they have entered into an agreement with a syndicate of underwriters for the offering on a bought-deal basis of some 120 million common shares.
Each stock will be sold at $23.25 for total gross proceeds of $2.79 billion.
An over-allotment option exercisable for up to 30 days would allow the province to sell an additional 12 million common shares at the same price, which would raise gross proceeds to about $3.07 billion.
After the offering, the province will continue to hold some 296.8 million common shares representing about 49.9 per cent of the company. That could drop to 47.8 per cent if the over-allotment option is exercised in full.
The Ontario government is prohibited by law from reducing its ownership below 40 per cent.
More than a year before the Liberal government announced in 2015 that it would partially privatize Hydro One, polling showed strong opposition to the idea.
Pollara conducted research at the government’s behest in January and February of 2014 asking people for their thoughts on selling Hydro One, and just 25 per cent of respondents supported the idea.
Fred Hahn, president of the Canadian Union of Public Employees in Ontario, called Monday’s share sale “a slap in the face to the people of this province.”
He said the union filed a lawsuit against the premier and ministers of finance and energy in December in an effort to stop any further sale of Hydro One shares.
“Premier (Kathleen) Wynne has made it clear she will not listen to the experts who warn that the sale is bad for the province, or listen to the people of Ontario who have been unequivocal in their rejection of the plan,” Hahn said in a statement Monday evening.
“Now she seems determined to push ahead with the sell-off so that she won’t have to listen to the court either. It’s disgraceful and we will continue to try and stop her.”
New Democrat energy critic Peter Tabuns also criticized the premier, saying the Hydro One sell-off will drive up electricity costs throughout the province.
“Today’s announcement shows that Premier Wynne and her Liberal government are still refusing to listen to the majority of Ontarians who say no to the privatization of their electricity system,” Tabuns said in a statement.
He added that, if elected in 2018, the NDP will fix the electricity system “broken by private power deals signed by Liberals and Conservatives.”
The Ontario government said that with the completion of the transaction announced Monday, it will have exceeded its goal of raising $9 billion in gross proceeds and other revenue benefits from partially privatizing Hydro One.
The Liberals have said they plan to use $5 billion to pay down some of the $8.3 billion in stranded debt left after the old Ontario Hydro was broken into five companies, while the remaining $4 billion would fund transit and infrastructure projects.
The government said it does not anticipate any further offerings of Hydro One shares.