UPDATE 1-Ontario to sell 60 pct of Hydro One in IPO

Thu Apr 16, 2015 12:45pm EDT
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(Adds comment from premier, background)

By Andrea Hopkins

TORONTO, April 16 (Reuters) - Ontario Premier Kathleen Wynne said on Thursday her Liberal government would sell up to 60 percent of the province's electrical utility Hydro One but would limit minority shareholders to 10 percent stakes.

Canada's most populous province would continue to regulate electricity rates, Wynne told a news conference.

"This will generate about C$4 billion ($3.27 billion), based on the council's estimates, which we will set aside for moving Ontario forward," Wynne said. "This is money we will not need to borrow, and every dollar of it will now be dedicated to help build those roads, highways, bridges, transit, and other high-priority infrastructure."

Wynne said the government would retain de facto control of Hydro One and would nominate the largest number of board members and the chair, and the power to set rates would continue to reside with the Ontario Energy board.

David Denison, former head of the Canada Pension Plan Investment Board, would replace Sandra Pupatello as Hydro One's chair, she said.

Ontario has seen its debt balloon to C$300 billion ($246 billion) since 2009 as the Canadian dollar, high-flying at the time, sideswiped exports and hurt the province's once-dominant manufacturing sector.

While the province has pledged to balance the budget in 2017-18, it is running a C$12.5 billion ($10.23 billion) deficit this fiscal year.   Continued...