https://news.ontario.ca/mei/en/2016/05/ontario-raises-197-billion-for-infrastructure-investments.html

News Release

Ontario Raises $1.97 Billion For Infrastructure Investments

More Than Half of Secondary Share Offering Sold to Retail Investors

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.

Quick Facts

• An over-allotment option is commonly available to underwriters of an offering, allowing the sale of shares in addition to the base amount committed to be sold in the offering.
• The Ontario government remains the largest shareholder of Hydro One, and by law no other shareholder or group of shareholders is permitted to own more than 10 per cent.
• Hydro One rates will continue to be set by the independent regulator, the Ontario Energy Board.
• Ontario is making the largest investment in public infrastructure in the province's history -- about $160 billion over 12 years, which is supporting 110,000 jobs every year across the province, with projects such as roads, bridges, transit systems, schools and hospitals. In 2015, the Province announced support for more than 325 projects that will keep people and goods moving, connect communities and improve quality of life.

Background Information

• Hydro One Transaction Details

Additional Resources

• The secondary share offering of Hydro One
• Details on the Hydro One secondary offering process
• The government’s plan to unlock the value of public assets
• The Trillium Trust and Moving Ontario Forward

Quotes

“Completing this second phase of broadening Hydro One’s ownership means the government will realize approximately $2 billion in gross proceeds from this offering to invest in new roads, bridges, rapid transit, schools and hospitals in communities across Ontario, and pay down debt.”

Bob Chiarelli

Minister of Energy