Ontario to sell Hydro One shares worth $2.8B

Final slate of available shares to complete provincial government’s plan to raise $9 billion, reduces public holding to 40 per cent.

Thestar.com
May 8, 2017
By Rob Ferguson

The Ontario government has pushed ahead with the final third of its controversial plan to sell a 60-per-cent stake in Hydro One, releasing 120 million shares at $23.25 to raise another $2.8 billion.

Energy Minister Glenn Thibeault announced the move after the markets closed Monday, saying more than $9 billion has now been raised in exchange for shares in the giant transmission utility.

“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,” he said in a statement.

“As a result, we do not anticipate any further offerings of Hydro One shares owned by the province.”

The Canadian Union of Public Employees (CUPE) quickly called the final release of Hydro One stock a “slap in the face” given its malfeasance lawsuit, launched last year to halt the sale of any more shares.

“Handing over half of Hydro One to for-profit shareholders is bad for everyone except the investors,” said Fred Hahn, president of the union’s Ontario operations.

Hydro One shares closed at $24.03 Monday under the ticker symbol H on the Toronto Stock Exchange, down two cents from Friday. In the last 52 weeks, they have traded between a high of $26.80 and a low of $22.06

Thibeault said the government is retaining a 40-per-cent stake in Hydro One, making it the “single largest shareholder” because no other shareholders are allowed to hold more than 10 per cent.

“Ontarians will continue to see ongoing value from our ownership stake for years to come.”

The opposition Progressive Conservatives and New Democrats have both called the Hydro One transactions a “fire sale” and urged the government to reverse course.

Both parties have also slammed the government for what they call excessive executive salaries at the company, with the chief executive officer earning $4.4 million a year in compensation.

This latest share offering allows the Bay Street underwriters to purchase up to 12 million additional shares in an “over-allotment option” that could boost the proceeds of the offering by $300 million, to $3.1 billion.

Thibeault said the money is going to transit projects such as GO regional express rail, light rail transit lines, road and bridge improvements and extending natural gas lines to more rural and northern communities where many homes are now heated with electricity.

CUPE said a number of public opinion polls have suggested the Hydro One sale is opposed by a majority of Ontarians.

“It is her duty to listen ... Kathleen Wynne has the lowest approval ratings of any sitting premier. What will it take to get her to stop ignoring the people?”