AN ONTARIO JUDGE HAS blocked Canada-based Hydro One’s US$2.9B stock sale, saying that the government left out provisions for initial public offerings in the 1998 act breaking up its energy monopoly.
Two unions opposed to the sale to government assets challenged the IPO, on the grounds that utilities should not make profits.
While the ruling is a setback for the government’s plan to open the energy market to competition and pay down debt, investors do not expect it to scuttle the sale. With their majority, the Progressive Conservatives can push through legislation to sell Hydro One, which is Canada’s biggest electricity distributor.
Ontario had planned to complete the sale of Hydro One, which had 2000 revenue of US$1.9B, by the end of June 2002. It had hired Goldman Sachs, RBC Dominion Securities and BMO Nesbitt Burns to lead the sale.
[bullet]Meanwhile, Canadian Niagara Power has received Ontario Energy Board approval to lease Port Colborne Hydro’s electricity distribution business. Under the agreement, Port Colborne will receive monthly lease payments from Canadian Niagara. The ten-year agreement is worth US$10M.