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

TORONTO, April 14, 2016 /CNW/ - The Province of Ontario today filed an updated 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, which require disclosure of shareholdings in publicly traded companies by significant shareholders and their related entities.

On April 5, 2016, the Corporation and the Province announced that they had entered into an agreement with a syndicate of underwriters for the secondary offering by the Province on a bought deal (firm commitment offering) basis (the "Offering"), of 72,434,800 common shares of the Corporation at a price of $23.65 per share. In addition, the Province granted to the underwriters an over-allotment option, exercisable for a period of 30 days following the closing of the Offering, to purchase up to an additional 10,865,200 common shares of the Corporation at a price of $23.65 per share.

On April 14, 2016, the Corporation and the Province announced that closing of the Offering had occurred, and that the Province sold 72,434,800 common shares of the Corporation to the underwriters at a price of $23.65 per share. Immediately prior to closing of the Offering, the Province owned 500,103,660 common shares of the Corporation, representing approximately 84% of the common shares of the Corporation.

After completing the Offering, the Province owns 427,668,860 common shares of the Corporation, representing approximately 71.9% of the common shares of the Corporation. If the underwriters' over-allotment option is exercised in full, the Province would own 416,803,660 common shares of the Corporation, representing approximately 70.1% of the common shares of the Corporation.

The Province holds 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 November 5, 2015 between the Province and the Corporation (the "Governance Agreement") and the registration rights agreement dated as of November 5, 2015 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 40% of the common shares of the Corporation, subject to the selling restrictions agreed with the underwriters in the Offering. 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 Corporation's supplemented PREP prospectus dated October 29, 2015 under the heading "Governance and Relationship with Principal Shareholder – Governance Agreement". Currently no other class of Voting Securities has been authorized.

The Province understands that Ontario Power Generation Inc. ("OPG") purchased 9,000,000 common shares of the Corporation in the Offering, representing approximately 1.5% of the common shares of the Corporation, in connection with its share delivery obligations under collective agreements with the Power Workers' Union and The Society of Energy Professionals. The Province is the sole shareholder of OPG and, accordingly, the Province and OPG may be considered "joint actors" under applicable securities laws. Under OSC Rule 62-504, the shareholdings of the Province and OPG may be aggregated for purposes of reporting and other obligations under applicable securities laws. If the common shares of the Corporation owned by OPG are included with the Province's shareholdings, the Province would own 436,668,860 common shares of the Corporation, representing approximately 73.4% of the common shares of the Corporation (425,803,660 common shares of the Corporation, representing approximately 71.6% of the common shares of the Corporation, if the underwriters' over-allotment option is exercised in full). OPG independently made the decision to purchase common shares of the Corporation in the Offering and does not have any agreement, arrangement or understanding with the Province with respect to common shares of the Corporation or the voting of those shares.

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. OPG has filed a separate share ownership report on the Corporation's SEDAR profile with respect to its purchase.

The Province is the beneficial and registered owner 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 Province of Ontario

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

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Province of Ontario

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