Calgary-based power generation company TransAlta Corp (TSX: TA) has initially closed a $750 million investment by Brookfield Asset Management.
Brookfield Renewable Partners invested $350 million in exchange for unsecured, subordinated debentures. The rest will be invested in October 2020 in exchange for a new series of redeemable, retractable first preferred shares.
The deal, announced in March, is intended to help TransAlta become a clean energy producer by 2025.
Brookfield’s Harry Goldgut and Richard Legault were recently elected to the board.
TransAlta Announces Initial Closing of the Brookfield Strategic Financing
CALGARY, May 1, 2019 /CNW/ – TransAlta Corporation (“TransAlta” or the “Company”) (TSX:TA) (NYSE:TAC) today announced the closing of the initial tranche of its previously announced $750 million strategic investment by an affiliate of Brookfield Renewable Partners (“Brookfield”).
“Having achieved this important milestone, we can now start to realize the benefits of our partnership and financing with Brookfield,” said Dawn Farrell, CEO of TransAlta. “We are moving swiftly to put capital to work including advancing our coal-to-gas conversions.”
As previously disclosed, Brookfield will invest $750 million in TransAlta through the purchase of exchangeable securities, which are convertible into an equity ownership interest in TransAlta’s Alberta hydro assets in the future at a value based on a multiple of the hydro assets’ future adjusted EBITDA. In connection with today’s initial closing, Brookfield invested $350 million in TransAlta in exchange for unsecured, subordinated debentures; the remaining $400 million will be invested in October 2020 in exchange for a new series of redeemable, retractable first preferred shares, subject to the satisfaction of certain customary conditions precedent. In connection with the transaction, TransAlta shareholders recently elected to its Board of Directors two experienced Brookfield executives, Harry Goldgut and Richard Legault, at its 2019 Annual and Special Shareholders’ Meeting.
The investment provides the financial flexibility to drive TransAlta’s transition to 100% clean energy by 2025, recognizes the anticipated future value of TransAlta’s Alberta hydro assets, and also accelerates the Company’s plan to return capital to its shareholders. It also creates a partnership with one of the world’s leaders in the renewables industry and is expected to generate value in the near-term, while driving sustainable growth over the long-term for all TransAlta shareholders.
Further information is contained in the Company’s material change report dated March 26, 2019 and investment agreement dated as of March 22, 2019 previously filed on www.sedar.com and www.sec.gov. Additional details about the strategic investment by Brookfield will be available in the Company’s further material change report, to be filed on www.sedar.com and www.sec.gov in due course. Copies of the definitive agreements entered into by TransAlta and Brookfield on the initial closing date will also be filed with the material change report.
About TransAlta Corporation
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. We provide municipalities, medium and large industries, businesses and utility customers clean, affordable, energy efficient, and reliable power. Today, we are one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 100 years, TransAlta has been a responsible operator and a proud community-member where its employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and we have been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. We are also proud to have achieved the Silver level PAR (Progressive Aboriginal Relations) designation by the Canadian Council for Aboriginal Business.
For more information about TransAlta, visit our web site at www.transalta.com.
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