Province of Ontario Reports Hydro One Share Ownership Pursuant to OSC Rule 62-504

TORONTO, Nov. 5, 2015 /CNW/ - The Province of Ontario today filed an initial report of its ownership of common shares of Hydro One Limited (the "Corporation") pursuant to OSC Rule 62-504 and corresponding provisions of applicable securities laws in other Canadian jurisdictions.

Prior to completing the Corporation's initial public offering (the "IPO"), the Province and the Corporation completed a series of transactions that resulted in, among other things, the issuance of new common shares of the Corporation to the Province (the "Pre-Closing Steps"). The Pre-Closing Steps are described in detail in the Corporation's supplemented PREP prospectus dated October 29, 2015 (the "Prospectus") under the heading "Pre-Closing Transactions – Pre-Closing Steps", which section is incorporated by reference in this report. After completing the Pre-Closing Steps and immediately prior to the closing of the IPO, the Province held 595,000,000 common shares of the Corporation, representing 100% of the common shares of the Corporation.

On November 5, 2015 (the "Closing Date"), the Province sold 81,100,000 common shares of the Corporation to the underwriters in the IPO at a price per share of $20.50. Immediately after completing the IPO, the Province held 513,900,000 common shares of the Corporation, representing approximately 86% of the common shares of the Corporation. The underwriters have been granted an over-allotment option by the Province to acquire a further 8,150,000 common shares at a price per share of $20.50.  As well, the Province agreed, subject to conditions, to sell after the IPO a further 3,756,097 common shares of the Corporation to two trusts established for the benefit of the Power Workers' Union and a further 1,890,243 common shares of the Corporation to two trusts established for the benefit of The Society of Energy Professionals, in each case at a price per share of $20.50. Assuming the exercise in full of the over-allotment option and after giving effect to the closing of the transactions with the trusts described above, the Province would own 500,103,660 common shares of the Corporation, or approximately 84% of the issued and outstanding common shares of the Corporation.

The Province holds the common shares of the Corporation for investment purposes. The Province continually reviews its investment alternatives and may purchase or sell securities of the Corporation from time to time in accordance with applicable laws and the governance agreement dated as of the Closing Date between the Province and the Corporation (the "Governance Agreement") and the registration rights agreement dated as of the Closing Date between the Province and the Corporation (the "Registration Rights Agreement").

The Province has indicated that it currently intends to sell further common shares of the Corporation over time, until it holds approximately 40% of the common shares of the Corporation, subject to the selling restrictions agreed with the underwriters in the IPO. The Electricity Act, 1998 (Ontario) (the "Electricity Act") restricts the Province from selling common shares of the Corporation if it would own less than 40% of the outstanding number of common shares of the Corporation after the sale. If as a result of the issuance of additional common shares by the Corporation, the Province owns less than 40% of the outstanding number of common shares of the Corporation, the Province must, subject to the approval of the Lieutenant Governor in Council and the necessary appropriations from the Legislature, take steps to acquire as many common shares of the Corporation as are necessary to increase the Province's ownership to not less than 40% of the outstanding number of common shares of the Corporation.  The manner in which, and the time by which, the Province must acquire these additional common shares of the Corporation will be determined by the Lieutenant Governor in Council.  These provisions of the Electricity Act also apply to any other class of Voting Securities (as that term is defined in the Electricity Act and the Governance Agreement) of the Corporation. Currently, the common shares are the only class of Voting Securities of the Corporation that has been authorized.

The Province has agreed in the Governance Agreement not to acquire previously issued Voting Securities if after that acquisition, the Province would own more than 45% of any class of Voting Securities, including the common shares of the Corporation. The Province has been granted pre-emptive rights by the Corporation under the Governance Agreement acquire up to 45% of any Voting Securities, or securities convertible into or exchangeable for Voting Securities, that the Corporation proposes to issue in future, subject to the limitations in the Governance Agreement. The restriction on the Province's right to acquire additional previously issued Voting Securities and the Province's pre-emptive right are described in detail in the Prospectus under the heading "Governance and Relationship with Principal Shareholder – Governance Agreement". Currently no other class of Voting Securities has been authorized.

A copy of the Province's share ownership report, which includes additional information about the Governance Agreement and the Registration Rights Agreement referred to above, may be found on the Corporation's SEDAR profile, at www.sedar.com.

The Province is the beneficial and registered owners of the shares referred to above:

Her Majesty the Queen in Right of Ontario (the "Province"),
as represented by the Minister of Energy
c/o Ministry of Energy
900 Bay Street, 4th Floor
Hearst Block
Toronto, ON  M7A 2E1

Disponible en français

SOURCE Ontario Ministry of Energy

For further information: Dan Moulton, Minister's Office, 416-327-3551; Lynn Wong, Communications Branch, 416-326-4542; ontario.ca/energy

RELATED LINKS
http://www.energy.gov.on.ca/index.cfmfuseaction=en

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Ontario Ministry of Energy

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