UPDATE 1-Canada's Hydro One drew buying interest from pension funds-Ontario minister

Mon Nov 2, 2015 11:09pm EST
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* Hydro One IPO set to close this week, raise up to C$1.83 bln

* IPO funds to help finance a slew of infrastructure projects (Adds comments from minister, background on sale)

By Euan Rocha

TORONTO, Nov 2 (Reuters) - Canada's Hydro One drew buying interest from some pension funds that covet such assets, but an initial public offering of the electricity distributor was always the government's preferred option, Ontario's finance minister said on Monday.

The IPO, which is expected to close later this week, is set to raise up to C$1.83 billion ($1.4 billion) for Canada's most populous province, which is only selling a roughly 15 percent stake in the utility.

"If the pension funds had their way, the broadening of the ownership structure in Hydro One wouldn't have occurred, because they wanted to take it all," Finance Minister Charles Sousa told media on the sidelines of the P3 2015 investment conference in Toronto.

The privatization of the utility will allow the province to fund transportation infrastructure projects, including public transit, bridges and highways, the government has stated.

"We see the value in ensuring there's broad ownership," said Sousa.

Detractors of the plan have questioned the wisdom of selling a stake in the asset that is a cash cow for the province, but the government has said it believes the public benefits even further from broadening the ownership as Hydro One as it will create a stronger-performing and more customer service-focused company.   Continued...