Jan 28, 2016
The Ontario government’s decision to list 15% of the province’s electricity transmission and distribution utility Hydro One as an initial public offering (IPO), despite the downturn in the economy, appealed to a market seeking stability.
While the provincial government retains ownership of 85% of Hydro One, it intends to allow the utility’s new management to run the company as a commercial enterprise without exercising its majority investment weight.
Steven Smith, Osler’s National Co-chair, served as legal advisor for the Hydro One IPO and spoke with the Financial Post about the transaction: “It’s an asset that affects almost everyone in Ontario. You don’t have many IPOs you can say that about. For the province to give up part of its ownership brought this into the privatization world. That makes it different from just a commercial IPO. It’s a landmark decision by the province to do that.”
While the Hydro One IPO was not without unique challenges, it raised $1.83 billion, making it the largest Canadian IPO in 15 years. The Ontario government has expressed its intention to reduce its holding to 40% in future secondary offerings.
Smith notes: “They’re acting as a 40% investor from day one. They had a good eye on what the market was going to require.”
Read Drew Hasselback’s full article, “Hydro One’s showcase IPO offered investors a slice of stability in uncertain times” in the Financial Post, January 28, 2016.