Utility and Ontario government inching closer to November share offering
TORONTO—Ontario is hurtling forward with its plan to take Hydro One public.
The company has filed a preliminary prospectus with the Ontario Securities Commission and other Canadian security agencies in preparation for its initial public offering.
“The prospectus, approved by the Province and the company’s Board of Directors, provides a comprehensive overview of Hydro One, including its operations and its outlook,” the Ontario government said.
The Ontario government has moved forward with plans to offer private investors ownership in the transmission and utility company amid both strong showings of support and bitter criticism from detractors. The sale will begin with an IPO for 15 per cent of the company.
Hydro One serves as a local electricity distributor for 1.3 million customers. Previous reports say the government hopes to raise $9 billion from the partial sale.
Ontario’s 2015 budget requires the provincial government remain the new company’s largest shareholder with a minimum 40 per cent ownership. Additionally, no other shareholder or group of shareholders would be permitted to own more than 10 per cent.
Also significant, Hydro One will continue to have no role in setting electricity rates; rate-setting is the responsibility of the independent Ontario Energy Board. In preparing for the sale, the government has introduced legislation that would strengthen the regulatory powers of the OEB to protect ratepayers and investigate complaints.
“Hydro One will now move forward to file an Amended & Restated Prospectus, following the OSC review, and will begin to undertake marketing activities and financial advisor consultations to help set a final share price for the Initial Public Offering, which the government intends to complete in November,” the government said.