Ontario Completes Sale of 14 Million Shares of Hydro One to Ontario First Nations
QUEENS PARK – The Wynne Government has announced that it has now completed the sale of 14,391,012 common shares of Hydro One Limited, representing approximately 2.4% of the outstanding common shares, to OFN Power Holdings LP, a limited partnership wholly-owned by Ontario First Nations Sovereign Wealth LP, which is in turn owned by 129 First Nations in Ontario at a purchase price of $18 per share for a total purchase price of $259,038,216. This transaction fulfills the Province’s commitment in its agreement-in-principle with the Chiefs-in-Assembly on behalf of the First Nations in Ontario, which was previously announced on July 12, 2016.
This transaction demonstrates the goodwill envisioned by the Political Accord to promote stronger economic relations and is one of many steps on Ontario’s journey of healing and reconciliation with Indigenous peoples. It will provide meaningful opportunities to First Nations for collective wealth creation and to advance economic development initiatives.
The purchase is financed through a 25-year term loan from the Province with a principal amount of $259,038,216. The interest rate for the term loan is at the Province’s relevant borrowing rate, plus 15 basis points. The shares sold in the transaction have been pledged as security for the term loan provided by the Province. The Province has also provided seed capital of approximately $29 million in cash to a new investment fund wholly-owned by Ontario First Nations Sovereign Wealth LP.
Immediately prior to the closing of the transaction, the Province-owned 296,803,660 common shares of Hydro One Limited, representing approximately 49.9% of the common shares of Hydro One Limited. After completing the transaction, the Province owns 282,412,648 common shares of Hydro One Limited, representing approximately 47.4% of the common shares of Hydro One Limited.
The Province holds common shares of Hydro One Limited for investment purposes. As announced on May 17, 2017, the Province has completed its initiative to broaden the ownership of Hydro One Limited and does not anticipate any further offerings of common shares of the Hydro One Limited by the Province. The Province continually reviews its investment alternatives and may purchase or sell securities of Hydro One Limited from time to time in accordance with applicable laws and the governance agreement dated as of November 5, 2015 between the Province and Hydro One Limited (the “Governance Agreement”) and the registration rights agreement dated as of November 5, 2015 between the Province and Hydro One Limited (the “Registration Rights Agreement”). A copy of the Province’s share ownership report, which includes additional information about the Governance Agreement and the Registration Rights Agreement referred to above, may be found on Hydro One Limited’s SEDAR profile, at www.sedar.com.
The Province is the beneficial and registered owner of the shares referred to above.
The Province has obtained a decision dated June 6, 2017 from the Canadian securities regulatory authorities (the “Decision”) that permits it to file reports in connection with the early warning reporting requirements that “disaggregate” the Hydro One Limited common shares held on behalf of the Province by the Minister of Energy from other Hydro One Limited securities that may be owned or controlled by other entities under the direct or indirect control of the Province (the “Non-Aggregated Holders”), subject to certain conditions. Hydro One Limited securities owned or controlled by such other Non-Aggregated Holders have not been, or may not have been, disclosed in this press release, in reliance on the Decision. This press release discloses only the Hydro One Limited common shares held on behalf of the Province by the Minister of Energy, as permitted by the Decision.