One of Canada’s largest initial public offerings in 15 years, and the biggest transaction in Ontario history, became official on Nov. 5 when shares in Hydro One began trading on the Toronto Stock Exchange.
More than 81 million shares were offered at an IPO price of $20.50 per common share with the potential of bringing in $1.66 billion in proceeds for the Province of Ontario. Within the first half hour, more than 10 million shares had been sold and by early afternoon, the shares were trading at $21.60, finally closing at $21.62. The offering was made through a syndicate of underwriters led by RBC Capital Markets and Scotiabank.
The common shares of the Company are listed on the Toronto Stock Exchange under the symbol “H”. Upon closing of the offering, there were 595,000,000 common shares issued and outstanding in the capital of Hydro One Ltd., of which the province owned 513,900,000 representing 86.4 percent of the issued and outstanding common shares, a Hydro One news release stated. The province had granted the underwriters an over-allotment option to purchase an additional 8.15 million common shares at the offering price, exercisable in whole or in part at any time for a period of 30 days after the closing of the offering.
Hydro One Ltd. is the largest electrical transmission and distribution utility in Ontario with approximately $23 billion in assets and 2014 revenues of over $6 billion. Hydro One Inc., a subsidiary of Hydro One Ltd., delivers electricity to more than 1.2 million customers across Ontario, and to large industrial customers and municipal utilities. Hydro One Inc. owns and operates Ontario’s approximately 29,000-km, high-voltage transmission network and an approximately 122,000 circuit kilometre primary low-voltage distribution network.
Prior to the closing of the offering, Hydro One Ltd. acquired all of the issued and outstanding shares of Hydro One Inc. The sale faced opposition from the Ontario public and sparked increasing political controversy as the offering date approached. Third quarter results for Hydro One Inc. are expected to be released on Nov. 13.