Ontario completes sale of Hydro One shares to First Nations
On July 12, 2016, the Province of Ontario and First Nations in Ontario, as represented by the Chiefs-in-Assembly, announced an agreement-in-principle for the Province to sell to First Nations for their collective benefit, up to approximately 15 million shares of Hydro One Limited (2.5 per cent of the total current outstanding common shares), depending on the level of First Nation participation, at a purchase price of C$18 per share.
The Chiefs-in-Assembly established a Chiefs Committee on Energy to undertake this initiative on behalf of the 133 First Nation communities in Ontario.
On January 2, 2018, the Province announced the completion of the sale of 14,391,012 common shares, 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.
The purchase was financed through a 25-year term loan from the Province with a principal amount of C$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 were pledged as security for the term loan provided by the Province. The Province also provided seed capital of approximately C$29 million in cash to a new investment fund wholly-owned by Ontario First Nations Sovereign Wealth LP.
Immediately prior to closing of the transaction, the Province owned 296,803,660 common shares of Hydro One Limited, representing approximately 49.9% of the common shares. After completing the transaction, the Province owns 282,412,648 common shares, representing approximately 47.4% of the common shares.
Hydro One is Ontario's largest electrical transmission and distribution company with approximately C$24.3 billion in assets and 2015 revenues of over C$6.5 billion.
Further information can be found on Canada Newswire's website.