The Ontario government has raised roughly C$1.97 billion ($1.54 billion; €1.34 billion) to fund infrastructure through a public offering of Hydro One after an over-allotment was fully subscribed by new shareholders.
The government previously drew C$1.7 billion through the sale of 72,434,800 shares on 5 April at $23.65 per share. At the time, Ontario granted an over-allotment option to underwriters, giving them the ability to purchase an additional 10,865,200 shares. Underwriters chose to soak up the full capacity of the over-allotment option, which accounts for 15 percent of the total offering. Retail investors accounted for 53 percent of new shareholders.
The government retains about 70 percent of Hydro One. It intends to reduce Ontario’s stake to 40 percent over time via future offerings while remaining the largest shareholder in the business.
The over-allotment shares were sold at the base price of $23.65, a 2.1 percent discount on the market closing price on the day of the launch. The syndicate of underwriters that acquired and placed the shares of Hydro One was led by RBC Capital Markets and Scotiabank.
The ministry reported that the net proceeds of the sale will be dedicated to the Trillium Trust, where they will support a plan to invest $160 billion over 12 years into roads, bridges, transit systems, schools and hospitals in a move expected to support 110,000 jobs. Current “priority projects” in contention for the generated funds include light rail transit schemes and natural gas network expansion in rural and northern communities.
Hydro One is an electricity transmission and distribution utility serving Ontario. Rates for Hydro One generation will continue to be set by the Ontario Energy Board, the ministry said.