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Gold/Mining/Energy : Hydro One - IPO -- Ignore unavailable to you. Want to Upgrade?

To: John Sladek who wrote (19)	4/24/2002 4:25:55 PM
From: John Sladek	Read Replies (1) \| Respond to of 52

March 28, 2002 - Ontarians to get half of Hydro One privatization Offering today seen as largest in Canadian history Paul Vieira Financial Post Hydro One Inc., the soon-to-be privatized electricity transmitter, is expected to file a preliminary prospectus today and sources say about half of the utility's shares will be set aside for Ontario residents. Bay Street sources said the underwriting syndicate was meeting last night to iron out details of group composition and what tasks each member will have. A prospectus would then be filed today with appropriate securities commissions for the privatization, expected to be the largest in Canadian history. A prospectus contains financial information, a description of the company and how the initial public offering will be structured, as well as such other details as whether the company intends to pay a dividend. However, few concrete numbers, such as the initial share price, will likely to be available. Sources say the Hydro One privatization will have a strong retail component. "They are going to sell a very high proportion, just under 50% of this whole thing, to Ontario retail customers," said one Bay Street financier. "There will never be a problem with Ontario retail customers getting Hydro One stock." It is understood Ontarians will be able to buy shares in bank branches or via licenced securities dealers. Moreover, it will be done through an instalment plan -- whereby Ontarians can place $1,000 down and receive $2,000 worth of stock. The remainder would be paid at a later date. "This is a way to spread demand," another Bay Street insider said, noting the same structure was used on other privatizations, such as Telus and Petro-Canada. The insider added: "The reason that they want to sell so much in Ontario is not just political ... but because the valuations of Canadian utilities are higher than U.S. comparables -- by quite a lot. If you had sold this largely in the U.S., and had to deal with the value of American comparables, you would have had less proceeds. The irony is, selling to a lot of retail in Ontario maximizes your proceeds." Ontario's sale of Hydro One is expected to fetch between $5-billion and $5.5-billion -- surpassing the $3.1-billion sale of Highway 407, a Toronto-area toll road, to a Spanish-led consortium. pvieira@nationalpost.com nationalpost.com