When Capital Power Corp. went public last May 8, a sigh of relief could be heard on Bay Street. "The Capital Power IPO reopened the Canadian IPO market after 12 months without an IPO," said Sante Corona, managing director, head of equity capital markets at TD securities, which was a joint bookrunner on the $500-million deal. Capital Power was used to spin out the power generation assets of EPCOR Utilities Inc., which is owned by the City of Edmonton. Essentially the deal was a privatization of a public asset, allowing Capital Power to expand its business, while limiting the city's risk. Mr. Corona said "it's been a while. Capital Power is the first privatization IPO since Manitoba Telecom in1996." As tax revenues dry up from a slow economy and government deficits increase expect to see more pressure on them to divest assets.
Source:www.financialpost.com