TransAlta Announces TSX Acceptance of Normal Course Issuer Bid
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today announced that the Toronto Stock Exchange (TSX) has accepted the notice filed by the Company to implement a normal course issuer bid (NCIB) for a portion of its common shares (Common Shares).
Pursuant to the NCIB, TransAlta may repurchase up to a maximum of 14,000,000 Common Shares, representing approximately 7.02% of its public float of Common Shares as at May 25, 2020. Purchases under the NCIB may be made through open market transactions on the TSX and any alternative Canadian trading platforms on which the Common Shares are traded, based on the prevailing market price. Any Common Shares purchased under the NCIB will be cancelled.
Transactions under the NCIB will depend on future market conditions. TransAlta will initially retain discretion whether to make purchases under the NCIB, and to determine the timing, amount and acceptable price of any such purchases, subject at all times to applicable TSX and other regulatory requirements. The period during which TransAlta is authorized to make purchases under the NCIB commences on May 29, 2020 and ends on May 28, 2021 or such earlier date on which the maximum number of Common Shares are purchased under the NCIB or the NCIB is terminated at the Company’s election.
Under TSX rules, not more than 228,157 Common Shares (being 25% of the average daily trading volume on the TSX of 912,630 Common Shares for the six months ended April 30, 2020) can be purchased on the TSX on any single trading day under the NCIB, with the exception that one block purchase in excess of the daily maximum is permitted per calendar week. There are currently 275,778,741 Common Shares of the Company issued and outstanding.
TransAlta has repurchased and cancelled 9,013,300 million Common Shares on the open market through the facilities of the TSX and/or alternative Canadian trading platforms at a cost of $76.53 million, or an average of $8.49 per share under its prior NCIB approved by the TSX on May 27, 2019 for the twelve-month period commencing May 29, 2019.
The NCIB provides the Company with a capital allocation alternative with a view to long-term shareholder value. TransAlta’s Board of Directors and Management believe that, from time to time, the market price of TransAlta’s Common Shares does not reflect the underlying value and purchases of Common Shares for cancellation under the NCIB may provide an opportunity to enhance shareholder value.
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
Forward-Looking Statements
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “propose”, “plans”, “intends” and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to TransAlta’s intentions with respect to the NCIB, the effects of repurchases of Common Shares and purchases thereunder, including any enhancement to shareholder value. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: the entering into of an automatic securities purchase plan; legislative or regulatory developments; any significant changes to Common Share price or trading volume; continued availability of capital and financing; changes to general economic, market or business conditions; business opportunities that become available to, or are pursued by TransAlta; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars.
TransAlta Reports First Quarter 2020 Results and Reaffirms 2020 Outlook
First Quarter 2020 Highlights
Generated $109 million or $0.39 per share of free cash flow (FCF) in the quarter compared to $95 million or $0.33 per share of FCF for the same period in 2019, an 18 per cent increase per share;
Adjusted availability was 92.8 per cent compared to 89.4 per cent for the same period in 2019;
Our partners on the Sheerness joint venture plant completed a planned outage to convert one of the units to have dual-fuel capabilities;
Entered into a Letter of Intent to sell the Pioneer Pipeline to NOVA Gas Transmission Ltd. (NGTL), a wholly-owned subsidiary of TC Energy, for a purchase price of $255 million;
Announced the acquisition of a 29 MW contracted cogeneration asset located in Michigan from two private companies for a purchase price of approximately US$27 million;
Advanced our Clean Energy Investment Plan by starting construction on the WindCharger battery project which is expected to reach commercial operation in July 2020;
Returned $9 million of capital to shareholders in the first quarter through the repurchase and cancellation of 1,297,000 common shares at an average price of $6.73 per share through our normal course issuer bid (NCIB) program;
Received regulatory approval from the Alberta Utilities Commission (AUC) for the repowering of Sundance Unit 5 and Keephills Unit 1 into combined cycle units; and
Successfully implemented our business continuity plan in response to the COVID-19 pandemic which ensured continued essential services to our customers and communities, and safeguarded the health and safety of our employees and contractors.
Subsequent Events
Commenced construction on the Windrise wind farm in April. We now expect the project to be fully commissioned for second half of 2021 due to a delay in the manufacturing of turbines from one of our suppliers due to COVID-19 pandemic; and
Held TransAlta’s first virtual Annual and Special Meeting of Shareholders (the “Meeting”) in which all Board nominees were elected and all resolutions passed. Upon his re-election, John Dielwart was appointed as Chair of the Board, replacing Ambassador Gordon Giffin who announced his retirement from the Board in January 2019.
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its first quarter 2020 financial results, with comparable EBITDA(1) of $220 million, in line with the same period last year. Funds from operations (FFO)(1,2) increased two percent to $172 million for the quarter compared to $169 million in 2019. FCF(1) for the first quarter was $109 million, representing a $14 million increase compared to the same period in 2019.
Comparable EBITDA for the three months ended March 31, 2020, was consistent with the same period in 2019. Strong performance at the US Coal and Wind and Solar segments was offset by lower comparable EBITDA at the Canadian Coal and Energy Marketing segments as well as higher Corporate costs.
Operations, maintenance and administration (OM&A) expense for the three months ended March 31, 2020, increased by $24 million compared to the same period in 2019. This increase in OM&A is largely due to realized gains and losses from the total return swap in our Corporate segment. A portion of the settlement cost of our share-based payment plans is fixed by entering into total return swaps, which are cash settled every quarter.
Free cash flow(1) (FCF), one of the Company’s key financial metrics, totalled $109 million for the three months ended March 31, 2020, an increase of $14 million compared to the same period last year. This was primarily as a result of continued strong operational results from our segments, realized foreign exchange gains and lower distributions paid to subsidiaries non-controlling interests.
“First quarter results were strong amidst an unprecedented pandemic in which the company reacted quickly and efficiently to ensure the essential power demands of our communities and customers were uninterrupted and everyone remained healthy,”- said Dawn Farrell, President and Chief Executive Officer. “Our results demonstrate the strength of our operations, our contractedness and our portfolio diversification, giving us confidence to reaffirm our free cash flow outlook for the year. Although the longer-term effect of the pandemic and global crude oil prices on power prices is uncertain, our cash flow generation is highly diversified across regions outside of Alberta with a majority contracted or hedged. Based on our forecast, we are on-track to be at the mid-point of our free cash flow outlook range.”
“Thank you to all employees, contractors and their families whose exceptional efforts ensure the continued strong operational performance of the company,” added Mrs. Farrell.
COVID-19 Response
The Company formally implemented its business continuity plan on March 9, 2020, which is focused on ensuring that: (i) employees that can work remotely do so; and (ii) employees operating and maintaining our facilities, and who are not able to work remotely, are able to work safely and in a manner that ensures they remain healthy. This plan includes health screening, enhanced cleaning arrangements, travel bans, revised work schedules, contingent work teams and the reorganization of processes and procedures to limit contact with other employees and contractors on-site.
Currently, all of our facilities remain fully operational and capable of meeting our customers needs. We have modified our operating procedures and implemented restrictions to non-essential access to our facilities to support continued operations through the pandemic. The Corporation continues to work and serve all of our customers and counterparties under the terms of their contracts. We have not experienced interruptions to service requirements. Electricity and steam supply continue to remain a critical service requirement to all of our customers and have been deemed an essential service in our jurisdictions.
Our growth construction programs are underway and progressing forward under our business continuity health measures. We are on-track to complete the conversion of Sundance Unit 6 during the second half of 2020. The Company continues to advance conversion of its Keephills Unit 2 and Unit 3 in 2021, but these projects could be delayed by two to three months due to delays in procuring certain equipment as a result of COVID-19.
The Company continues to maintain a strong financial position in part due to our long-term contracts and hedged positions. The Company is scheduled to receive $400 million from the second tranche of financing from the Brookfield investment in the fourth quarter of 2020 and has access to additional capital through potential project financing of existing assets that are currently unencumbered. We currently have access to $1.7 billion in liquidity including $338 million in cash and have sufficient liquidity to meet the upcoming debt maturity due November 2020 and growth construction requirements. The next major debt repayment is scheduled for November 2022.
In addition, the Company has 74 per cent of its Alberta thermal baseload merchant generation hedged at approximately $52 per MWh for the remainder of 2020.
First Quarter 2020 Segmented Review Comparable EBITDA (in CAD$ millions)
3 Months Ended
March 31, 2020
March 31, 2019
Canadian Coal
44
63
U.S. Coal
33
(10)
Canadian Gas
29
30
Australian Gas
30
30
Wind and Solar
74
69
Hydro
26
27
Energy Marketing
13
19
Corporate
(29)
(7)
Total Comparable EBITDA(2)
220
221
Canadian Coal: Comparable EBITDA for the three months ended March 31, 2020, decreased $19 million compared to the same period in 2019. This largely reflects lower merchant production and associated revenue primarily due to the planned dual-fuel conversion outage at Sheerness, lower contract production as a result of curtailments and lower merchant production in the coal fleet resulting from additional wind resources supplying power to the market and lower demand resulting from COVID-19 and reduced oil production in the province in March.
U.S. Coal: Comparable EBITDA returned to more normalized levels in the three months ended March 31, 2020, increasing by $43 million compared to the same period in 2019, primarily due to the impacts of an isolated and extreme pricing event in March 2019 during which Centralia was unable to commit one of its units to physical production for day-ahead supply due to an unplanned forced outage repair. In addition, comparable EBITDA in the first quarter of 2020 benefited from the strengthening of the US dollar relative to the Canadian dollar.
Canadian Gas: Comparable EBITDA for the three months ended March 31, 2020, was consistent with the same period in 2019, which was in line with expectations as the impact of lower merchant production and revenue at Sarnia was largely offset by lower fuel costs. Due to the nature of our contracts, changes in production do not have a significant financial impact as our contracts are structured as capacity payments with customer supplied fuel or a passthrough of fuel costs.
Australian Gas: Comparable EBITDA for the three months ended March 31, 2020, was consistent with the same period in 2019, as the weakening of the Australian dollar relative to the Canadian dollar was offset by lower costs due to cost-saving initiatives.
Wind and Solar: Comparable EBITDA for the three months ended March 31, 2020, increased by $5 million compared with the same period in 2019, primarily due to the timing of environmental attributes sales, higher production, partially offset by lower pricing in Alberta.
Hydro: Comparable EBITDA for the three months ended March 31, 2020, was consistent with the same period in 2019, as higher Ancillary Services revenues were offset by lower energy revenues and higher net payments relating to the Alberta Hydro PPA.
Energy Marketing: Comparable EBITDA for the three months ended March 31, 2020, decreased by $6 million compared to the same period in 2019, which was in line with expectations as we had particularly strong performance from the US Western desk in the first quarter of 2019.
Corporate: Our Corporate overhead costs for the three months ended March 31, 2020, were $29 million, an increase of $22 million compared to $7 million in the same period in 2019, primarily due to realized gains and losses from the total return swap. A portion of the settlement cost of our share-based payment plans is fixed by entering into total return swaps, which are cash settled every quarter. In the three months ended March 31, 2020, we realized a loss of $11 million from the total return swap on our share-based payment plans, whereas in the same period last year we realized a net gain of $13 million.
Consolidated Financial Highlights
Net earnings attributable to common shareholders for the three months ended March 31, 2020, was $27 million, compared to a loss of $65 million in the same period in the prior year. Strong earnings from our US Coal and Wind and Solar segments and a reduction in the Centralia mine decommissioning provision due to changes in discount rates were partially offset by higher Corporate OM&A costs, foreign exchange losses due to the weakening of the Canadian dollar relative to the US dollar and lower earnings attributable to non-controlling interests.
Total sustaining capital expenditures of $29 million were $4 million higher compared to 2019 primarily due to higher planned major maintenance in our coal segments.
First Quarter 2020 Highlights
In $CAD millions, unless otherwise stated
3 Months Ended
March 31, 2020
March 31, 2019
Adjusted availability (%)(3)
92.8%
89.4%
Production (GWh) (3)
6,486
8,125
Revenues
$606
$648
Fuel, carbon compliance and purchased power
$238
$366
Operations, maintenance and administration
$128
$104
Net earnings (loss) attributable to common shareholders
$27
$(65)
Cash flow from operating activities
$214
$82
Comparable EBITDA(1)
$220
$221
Funds from operations(1)
$172
$169
Free cash flow(1)
$109
$95
Net earnings (loss) per share attributable to common shareholders, basic and diluted
$0.10
$(0.23)
Funds from operations per share(1)
$0.62
$0.59
Free cash flow per share(1)
$0.39
$0.33
Dividends declared per common share
$0.04
–
Dividends declared per preferred share(4)
$0.26
–
TransAlta is in the process of filing its unaudited interim Consolidated Financial Statements and accompanying notes, as well as the associated Management’s Discussion & Analysis (MD&A). These documents will be available May 12, 2020 on the Investors section of TransAlta’s website at transalta.com or through SEDAR at www.sedar.com and EDGAR at www.sec.gov/edgar.shtml.
Notes
(1) These items are not defined under IFRS. Presenting these items from period to period provides management and investors with the ability to evaluate earnings trends more readily in comparison with prior periods results. Refer to the Comparable EBITDA, Funds from Operations and Free Cash Flow and Earnings and Other Measures on a Comparable Basis sections of the Company’s MD&A for further discussion of these items, including, where applicable, reconciliations to measures calculated in accordance with IFRS.
(2) Excludes payments associated with finance leases.
(3) Availability and production includes all generating assets under generation operations that we operate and finance leases and excludes hydro assets and equity investments. Production includes all generating assets, irrespective of investment vehicle and fuel type.
(4) Weighted average of the Series A, B, C, E, and G preferred share dividends declared. Dividends declared vary year over year due to timing of dividend declarations.
Conference call
TransAlta will hold a conference call and webcast at 9:00 a.m. MT (11:00 a.m. ET) today, May 12, 2020, to discuss our first quarter 2020 results. The call will begin with a short address by Dawn Farrell, President and CEO, and Todd Stack, Chief Financial Officer, followed by a question and answer period for investment analysts and investors. A question and answer period for the media will immediately follow.
First Quarter 2020 Conference Call:
Toll-free North American participants call: 1-888-231-8191
Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 1951906 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 transalta.com.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward looking statements, including statements regarding the business and anticipated financial performance of the Company that are based on the Company’s current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as “plans”, “expects”, “proposed”, “will”, “anticipates”, “develop”, “continue”, and similar expressions suggesting future events or future performance. In particular, this news release contains forward-looking statements, pertaining to, without limitation, the following: the potential impact of COVID-19 on the Company and the actions to be undertaken by the Company in response to the COVID-19 pandemic; entering into an agreement with NGTL for the sale of the Pioneer Pipeline, including the terms and timing thereof; the commercial operation date for the WindCharger battery project; the potential repowering of Sundance Unit 5 and Keephills Unit 1 into combined cycle units; the conversion of Sundance Unit 6 by the second half of 2020; the conversion of Keephills Unit 2 and Unit 3, and the timing thereof; the closing of the $400 million investment from Brookfield; access to additional capital through potential project financing of existing assets that are currently unencumbered; and sufficient liquidity to meet the upcoming debt maturity due November 2020 and growth construction requirements. The forward-looking statements contained in this news release are based on many assumptions and are subject to a number of significant risks and uncertainties that could cause actual plans, performance, results or outcomes to differ materially from current expectations. Factors that may adversely impact what is expressed or implied by the forward-looking statements contained in this news release include risks relating to the impact of COVID-19 and the associated general economic downturn, the impact of which will largely depend on the overall severity and duration of COVID-19 and the general economic downturn, which cannot currently be predicted, and which present risks including, but not limited to: more restrictive directives of government and public health authorities; reduced labour availability impacting our ability to continue to staff the Company’s operations and facilities; impacts on the Company’s ability to realize its growth goals; decreases in short-term and/or long-term electricity demand and lower power pricing; increased costs resulting from the Company’s efforts to mitigate the impact of COVID-19; deterioration of worldwide credit and financial markets that could limit the Company’s ability to obtain external financing to fund its operations and growth expenditures; a higher rate of losses on accounts receivables due to credit defaults; further disruptions to the Company’s supply chain; impairments and/or write-downs of assets; and adverse impacts on the Company’s information technology systems and the Company’s internal control systems as a result of the need to increase remote work arrangements, including increased cybersecurity threats. Other factors that may adversely impact the Company’s forward-looking statements include, but are not limited to, risks relating to: operational risks involving the Company’s facilities, including unplanned outages at such facilities; disruptions in the transmission and distribution of electricity; the effects of weather and other climate-related risks; disruptions in the source of water, wind, solar or gas resources required to operate our facilities; natural disasters; equipment failure and our ability to carry out repairs in a cost-effective or timely manner; and industry risks and competition. The foregoing risk factors, among others, are described in further detail in the Company’s Management’s Discussion and Analysis and Annual Information Form for the year ended December 31, 2019, which are available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s expectations only as of the date of this news release. The purpose of the financial outlooks contained in this news release are to give the reader information about management’s current expectations and plans and readers are cautioned that such information may not be appropriate for other purposes and is given as of the date of this news release. The Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
Note: All financial figures are in Canadian dollars unless otherwise indicated.
TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
TransAlta Corporation (TSX: TA) (NYSE: TAC) (TransAlta or the Company) held its virtual Annual and Special Meeting of Shareholders on April 21, 2020. A total of 170,787,738 common shares, representing 61.64 per cent of the shares outstanding were represented in person and by proxy at the meeting.
The following resolutions were considered by Shareholders:
Election of Directors
The twelve director nominees proposed by management were elected. The votes by ballot were received as follows:
Nominee
Votes For
Per cent
Withheld
Per cent
Rona H. Ambrose
161,396,937
99.29
1,149,763
0.71
John P. Dielwart
159,572,935
98.17
2,973,765
1.83
Dawn L. Farrell
161,944,487
99.63
602,213
0.37
Robert C. Flexon
161,999,064
99.66
547,636
0.34
Alan J. Fohrer
161,364,944
99.27
1,181,756
0.73
Harry Goldgut
162,091,002
99.72
455,698
0.28
Richard Legault
162,090,995
99.72
458,705
0.28
Yakout Mansour
161,992,213
99.66
554,487
0.34
Georgia R. Nelson
160,848,072
98.95
1,698,628
1.05
Beverlee F. Park
161,330,347
99.25
1,216,353
0.75
Bryan D. Pinney
160,934,046
99.01
1,612,654
0.99
Sandra R. Sharman
162,016,245
99.67
530,455
0.33
Appointment of Auditors
The appointment of Ernst & Young LLP to serve as the auditors for 2020 was approved. The votes by ballot were received as follows:
Votes For
Per cent
Withheld
Per cent
168,957,493
98.93
1,830,247
1.07
Advisory Vote on Executive Compensation
The advisory vote on the Company’s approach to executive compensation was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
160,519,556
98.75
2,027,143
1.25
Amendment and Restatement of By-law No. 1
The resolution authorizing the Corporation to amend and restate its Amended and Restated By-law No. 1 was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
161,733,500
99.50
813,198
0.50
Amendment and Restatement of By-law No. 2
The resolution authorizing the Corporation to amend and restate its Advance Notice By-law No. 2 was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
161,918,877
99.61
627,882
0.39
Amendment to Stock Option Plan
The resolution authorizing the Corporation to amend its Stock Option Plan was approved. The votes by ballot were received as follows:
Votes For
Per cent
Votes Against
Per cent
154,328,099
94.94
8,218,600
5.06
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
The Board of Directors of TransAlta Corporation (TSX: TA) (NYSE: TAC) today declared a quarterly dividend of $0.0425 per common share payable on July 1, 2020 to shareholders of record at the close of business on June 1, 2020.
The Board of Directors also declared the following quarterly dividend on its Cumulative Redeemable Rate Reset First Preferred Shares for the period starting from and including March 31, 2020 up to but excluding June 30, 2020:
Preferred Shares
TSX Stock Symbol
Dividend Rate
Dividend Per Share
Record Date
Payment Date
Series A
TA.PR.D
2.709%
$0.16931
June 1, 2020
June 30, 2020
Series B*
TA.PR.E
3.668%
$0.22800
June 1, 2020
June 30, 2020
Series C
TA.PR.F
4.027%
$0.25169
June 1, 2020
June 30, 2020
Series E
TA.PR.H
5.194%
$0.32463
June 1, 2020
June 30, 2020
Series G
TA.PR.J
4.988%
$0.31175
June 1, 2020
June 30, 2020
*Please note the quarterly floating rate on the Series B Preferred Shares will be reset every quarter.
All currency is expressed in Canadian dollars except where noted. When the dividend payment date falls on a weekend or holiday, the payment is made the following business day.
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
Media Advisory: TransAlta First Quarter 2020 Results and Conference Call
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its first quarter 2020 results before markets open on Tuesday, May 12, 2020. A conference call and webcast to discuss the results will be held for investors, analysts, members of the media and other interested parties the same day beginning at 9:00 a.m. Mountain Time (11:00 a.m. ET). The media will be invited to ask questions following analysts.
Please contact the conference operator five minutes prior to the call, noting TransAlta Corporation as “the company.”
First Quarter 2020 Conference Call:
Toll-free North American participants call: 1-888-231-8191
Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/events-and-presentations. If you are unable to participate in the call, the instant replay is accessible at 1-855-859-2056 (Canada and USA toll free) with TransAlta pass code 1951906 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
TransAlta Provides Update On COVID-19 Implemented Measures
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) wishes to inform all its stakeholders of the measures that have been implemented to ensure the safety of its employees and to ensure that its facilities remain fully operational to meet the essential power demands of our customers.
“The health and safety of our employees, contractors and communities is paramount during this challenging time prompted by the COVID-19 pandemic”,- said Dawn Farrell, President and Chief Executive Officer of the Company. “Our focus remains on generating essential electricity across Canada, the United States and Australia to support our customers needs, including the needs of other essential service providers. Financially, we are in a solid position and have strong visibility to cash flow throughout 2020 due to our contracts and hedges. I want to thank all our employees and their families for adapting quickly during this unprecedented time and ensuring our services continue without interruption.”
Safety, health and wellness of employees are a top priority
As early as March 6, employees who could work remotely from home have been doing so. TransAlta formally implemented its business continuity plan on March 9 which focused on ensuring employees operating and maintaining our facilities, who are not able to work remotely, continue to remain healthy. This plan includes health screening, enhanced cleaning arrangements, travel bans, revised schedules, contingent work teams and the reorganization of processes and procedures to limit contact with other employees and contractors on-site.
The Company continuously monitors government-recommended health measures to safeguard the health and well-being of its employees and adjusts its continuity plan as needed for the continued delivery of essential services to customers and communities.
Focus on Continued Operations
Currently, all of our facilities remain fully operational and capable of meeting our customers needs. We are monitoring recommendations by the public health authorities related to COVID-19 in all our operating regions and are adjusting operational requirements as required. Considering the importance of social distancing and other recommended health practices, we have modified our operating procedures and implemented restrictions to non-essential access to our facilities to support continued operations through the pandemic.
Strong Financial Position and Liquidity Levels
TransAlta continues to be in a strong financial position with no near-term liquidity issues. At the end of the first quarter, the Company had $1.7 billion of liquidity, including approximately $330 million in cash. The Company is also scheduled to receive the $400 million second tranche of the Brookfield investment in the fourth quarter. We continue to have access to additional capital through potential project financing of existing assets that are currently unlevered.
The Company has sufficient existing liquidity available to meet the upcoming debt maturity which is due November 2020. The next major debt repayment is scheduled for November 2022.
The Company has approximately 50 per cent of its baseload merchant generation in Alberta hedged in the $52/MWh range for the remainder of 2020.
TransAlta remains confident in its ability to fund both the preferred and common dividends with internally generated cash. The Company was active under its share buyback program during the first quarter prior to entering our blackout period which began on April 1. We will continue to monitor the financial markets and assess the timing of further repurchases, subject to blackout periods.
The Company continues to work with and serve all our customers and counterparties under the terms of their contracts. We have not experienced interruptions to service requirements. Electricity and steam supply continue to remain a critical service requirement to all our customers and has been deemed an essential service in our jurisdictions.
Our highly diversified asset portfolio, by both fuel type and operating region, provide stability in our cash flows and highlight the strength of our long-term contracted asset base.
Strategic Execution on Track
The impacts from the COVID-19 pandemic and resulting slowdown in the Alberta economy have not altered the Company’s strategy. We remain focused on our natural gas conversion strategy in the province and continue to progress on our growth initiatives.
At this time, the Company continues to progress each of its construction projects currently underway and further updates in respect to the construction timelines will be provided as more information becomes available.
We continue to assess the financial impacts resulting from the COVID-19 pandemic and the current and future outlook on global oil prices. There continues to be significant uncertainty due to the COVID-19 pandemic and we will continue to closely monitor developments and will provide updates if material changes to the Company’s business, operations or capital are reasonably likely to arise.
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
Cautionary Statement Regarding Forward Looking Information
This News Release includes “forward-looking information”, within the meaning of applicable Canadian securities laws, and “forward-looking statements”, within the meaning of applicable United States securities laws, including the United States Private Securities Litigation Reform Act of 1995 (collectively referred to herein as “forward-looking statements”). All forward-looking statements are based on our beliefs as well as assumptions based on information available at the time the assumption was made and on management’s experience and perception of historical trends, current conditions, results and expected future developments, as well as other factors deemed appropriate in the circumstances. Forward-looking statements are not facts, but only predictions and generally can be identified by the use of statements that include phrases such as “will”, “expect”, “intend”, “plan”, “potential”, “enable”, “continue” or other comparable terminology. These statements are not guarantees of our future performance, events or results and are subject to a number of significant risks, uncertainties and other important factors that could cause our actual performance, events or results to be materially different from that set out in the forward-looking statements. In particular, this News Release contains forward-looking statements including, but not limited to, statements relating to: our facilities remaining fully operational; our operating procedures; the continued delivery of essential services to customers and communities; the Company’s future financial position and near-term liquidity; the closing of the $400 million second tranche of the Brookfield investment in the fourth quarter; sufficient existing liquidity to meet the debt maturity due November 2020; ability to fund dividends with internally generated cash; stability in cash flows and strength of our long-term contracted asset base; the impacts from the COVID-19 pandemic and resulting slowdown in the Alberta economy not altering the Company’s strategy; the natural gas conversion strategy and our growth initiatives; and no material delays in our construction projects currently underway. The material factors and assumptions used in the preparation of the forward-looking statements contained herein, which may prove to be incorrect, include, but are not limited to, the scope of the COVID-19 pandemic and duration thereof; the market conditions and the other assumptions set forth herein and in our Annual Information Form and Management’s Discussion and Analysis for the year end dated December 31, 2019, filed under the Company’s profile with the Canadian securities regulators on www.sedar.com and the U.S. Securities and Exchange Commission on www.sec.gov. By their nature, forward-looking statements are not guarantees of future performance, events, results or actions and are subject to a number of significant risks, uncertainties, assumptions and factors that could cause our actual plans, performance, results or outcomes to differ materially from the forward-looking statement. Factors that may adversely impact what is expressed or implied by forward-looking statements contained in this News Release include, but are not limited to, risks relating to: a significant expansion in COVID-19 restricting or prohibiting the operation of the Company’s facilities or significantly impacting the Company’s supply chain; the duration and extent of the relatively low global oil prices, and its impact on the Province of Alberta; the forecasted electricity load in the Province of Alberta being lower than expected resulting in potentially lower power prices within the Province; the global market and economic conditions and fluctuations in commodity prices; risk relating to general market conditions and the ability to raise capital on economic terms; risks relating to attracting and retaining highly skilled employees; ability to retain key personnel; the potential for and effects of labour disputes or other unanticipated difficulties with or shortages of labour or interruptions in production; the inherent uncertainty of construction projects, including potential for unexpected costs or delays; risk relating to litigation and regulatory developments; and other risk factors contained in the Company’s Annual Information Form and Management’s Discussion and Analysis for the year end dated December 31, 2019. Readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on them, which reflect the Company’s expectations only as of the date hereof. Forward-looking statements do not take into account the effect that transactions or non-recurring or other special items announced or occurring after the statements are made may have on the Company’s business. For example, they do not include the effect of business dispositions, acquisitions, other business transactions, asset write-downs, asset impairment losses, or other charges announced or occurring after forward-looking statements are made. The forward-looking statements included in this News Release are made only as of the date hereof and we do not undertake to publicly update these forward-looking statements to reflect new information, future events or otherwise, except as required by applicable laws. In light of these risks, uncertainties and assumptions, the forward-looking statements might occur to a different extent or at a different time than we have described or might not occur at all.
TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today announced that it has adopted certain changes to its Stock Option Plan.
In TransAlta’s management information circular dated March 9, 2020 (the Information Circular) for its upcoming annual and special meeting of shareholders scheduled to be held on April 21, 2020 (the Meeting), the Company disclosed that it is seeking approval by its shareholders at the Meeting to amend its Stock Option Plan solely to increase the number of shares available for issuance pursuant to options granted under the Stock Option Plan. In the meantime, in order to align features of the Stock Option Plan with current best governance and market practices, the Company has adopted certain changes to the Stock Option Plan’s amendment provisions to further limit the Board of Director’s ability to make amendments without shareholder approval in the future. As a result of these changes, the amendment provisions in the Stock Option Plan require that majority shareholder approval be obtained for any changes to the Stock Option Plan (in addition to those enumerated items already requiring shareholder approval) that would: (i) reduce the exercise price of (or any cancellation and re-grant of an option that would reduce the exercise price of) options or other entitlements held by non-insiders; (ii) extend the term of options held by non-insiders beyond their original expiry date; (iii) expand the Stock Option Plan’s eligibility criteria or participation limits (including amendments to the definition of participant) applicable to non-employee directors; and (iv) permit options to be transferred or assigned other than for normal estate settlement purposes. At the Meeting, shareholders will still be asked to approve an ordinary resolution to increase the number of shares available for issuance under the Stock Option Plan, as described in the Information Circular. TransAlta’s Board of Directors continues to unanimously recommend that shareholders vote FOR the increased allocation under the Stock Option Plan, which will only become effective if approved by shareholders at the Meeting.
A copy of the updated Stock Option Plan, which reflects the changes described above, will be available under our profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. Further details in respect of the Meeting are available in the Information Circular and related proxy materials, which can be found under our profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov.
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its website at transalta.com.
TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today issued a notice (the Notice) to holders of common shares (Shareholders) and filed the Notice along with its management information circular (the Circular) in connection with its annual and special meeting of Shareholders to be held on Tuesday, April 21, 2020 at 10:30 a.m. (Calgary Time) (the Meeting). A copy of the Notice and Circular can be downloaded from the Company’s SEDAR profile at www.sedar.com and the Company’s EDGAR profile at www.sec.gov/edgar.shtml. The Notice and Circular are also available at TransAlta’s website. The Notice provides that the Meeting will be held in a virtual-only meeting format.
TransAlta holds safety as a core value. The Company has been carefully monitoring the outbreak of the novel coronavirus (COVID-19) and is proactively implementing measures to prioritize the health and well-being of its employees, customers, suppliers, partners, shareholders, communities and other stakeholders, while ensuring continuity in the provision of its critical services in each of Canada, the United States and Australia. In light of the rapidly evolving COVID-19 public health emergency and to mitigate against its risks, the Meeting to be held on Tuesday, April 21, 2020 at 10:30 a.m. (Calgary Time) will be held in a virtual-only meeting format. Shareholders will not be able to attend the Meeting physically. A virtual-only meeting format is being adopted in response to the COVID-19 situation to enfranchise and give all Shareholders an equal opportunity to participate at the Meeting regardless of their geographic location or the particular constraints, circumstances or risks they may be facing as a result of COVID-19. TransAlta is not aware of any items of business to be brought before the Meeting other than those described in the Circular.
The Meeting can be accessed by logging in online at https://web.lumiagm.com/223766460. As described in the Circular, registered Shareholders are entitled to participate at the Meeting if they held their common shares as of the close of business on March 5, 2020, the record date. Registered Shareholders who wish to appoint a third-party proxyholder other than the named TransAlta proxy nominees can do so by printing the proxyholder’s name in the space provided in the enclosed form of proxy. Non-registered (beneficial) Shareholders who wish to vote at the Meeting will be required to appoint themselves as proxyholder in advance of the Meeting by writing their own name in the space provided on the voting instruction form provided by their intermediary, generally being a bank, trust company, securities broker, trustee or other institution.
Registered Shareholders and duly appointed proxyholders (including beneficial Shareholders who have duly appointed themselves as proxyholders) who participate at the Meeting online will be able to listen to the Meeting, ask questions and vote, all in real time, provided that they are connected to the internet. Guests, including non-registered Shareholders who have not duly appointed themselves as proxyholder, can log in to the Meeting as set out below. Guests can listen to the Meeting but will not able to communicate or vote. In all cases, Shareholders must follow the instructions set out in their applicable proxy or voting instruction forms and those set out in the Notice, which are also available online at transalta.com/financial-and-annual-reports/management-proxy-circulars. If you have questions regarding your ability to participate or vote at the Meeting, please contact Computershare at 1-800-564-6253.
One item of business being put forward to Shareholders for confirmation at this year’s Meeting is an amendment and restatement of the Company’s Amended and Restated By-law No.1, which sets out the general rules governing the business and affairs of the Company. The changes are intended to modernize the Company’s corporate governance practices and align them more closely with other leading Canadian public companies governed by the Canada Business Corporations Act (CBCA). As a best governance practice, the Company adopted the amendments to take effect only if and upon receiving Shareholder confirmation at the Meeting. However, in light of the COVID-19 global pandemic and the need to shift to a virtual-only meeting format to address the concerns it has created, the Company’s Board of Directors subsequently approved the immediate adoption of the amendment and restatement of the Company’s Amended and Restated By-law No.1 to the extent reasonably necessary to permit the holding of the Meeting in a virtual-only format under the CBCA. The amendments are discussed in the Meeting materials and accessible electronically. The by-law amendments will be effective only for this year’s Meeting and will cease to have effect if Shareholders do not confirm the amendments at the Meeting, all as described in the Notice.
TransAlta’s first priority is always the well-being of its employees, customers, suppliers, partners, Shareholders, communities and other stakeholders. The Company’s thoughts are with those already impacted by COVID-19 and TransAlta acknowledges, with gratitude, the efforts of those individuals on the front lines confronting this public health crisis.
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its website at transalta.com.
Forward Looking Statements:
This news release contains forward looking statements within the meaning of applicable securities laws.The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating to: the Meeting and the items of business to be raised at the Meeting. These forward looking statements are based on a number of assumptions considered by the Company to be reasonable as of the date of this news release, including, but not limited to, the assumption that no new shareholder business will be proposed at the Meeting. The forward looking statements are subject to a number of risks and uncertainties that may cause actual performance, events or results to differ materially from those contemplated by the forward looking statements, which include risks relating to the impact and scope of COVID-19. Readers are cautioned not to place undue reliance on this forward looking information, which is given as of the date it is expressed in this news release. The Company undertakes no obligation to update or revise any forward looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from those in the forward looking information, refer to the Company’s Annual Report and Management’s Discussion and Analysis filed under the Company’s profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov.
TransAlta Announces Acquisition of a Contracted Cogeneration Asset in Michigan
TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) announced today the acquisition of a contracted cogeneration asset from two private companies for a purchase price of approximately US$27 million, subject to working capital adjustments. The asset is a 29 MW cogeneration facility in Michigan which is contracted under a long-term power purchase agreement and steam sale agreement for approximately six years with high quality counterparties.
“The acquisition marks our first U.S. cogeneration project and aligns with our strategy of growing our on-site generation business, diversifying our cogeneration portfolio, and increasing the pipeline of assets for potential future drop-downs into TransAlta Renewables” – said Dawn Farrell, President and Chief Executive Officer of TransAlta. “The expansion into new geographic markets further enhances our position as a leader in behind the fence generation and provides potential for future opportunities in the U.S. cogeneration space.”
The cogeneration facility, which comprises a single GE LM2500 gas turbine and an ABB steam turbine, has been operational since 1991. The electricity and steam output of the facility are fully contracted providing consistent, predictable revenues through 2026. The acquisition will be funded with cash on hand.
Investment Highlights:
Attractive cash-on-cash yield and project return acquisition metrics;
Expands TransAlta’s platform in the U.S. and is an entry into the U.S cogeneration space;
Potential drop-down candidate to TransAlta Renewables Inc.;
Long-term contracted cash flows with high quality counterparties; and
Provides further geographic, technology and counterparty diversification.
The acquisition is subject to customary regulatory approvals and is expected to close in the second quarter of 2020.
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its website at transalta.com.
Forward Looking Statements:
This news release contains forward looking statements within the meaning of applicable securities laws.The use of any of the words “expect”, “anticipate”, “continue”, “estimate”, “may”, “will”, “project”, “should”, “propose”, “plans”, “intends” and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating to: the completion of the acquisition of the cogeneration facility and the associated benefits therefrom; expectations and plans for future growth, including expansion into new markets; and the potential for a drop-down of the assets to TransAlta Renewables Inc. These forward looking statements are based on a number of assumptions considered by the Company to be reasonable as of the date of this news release, including, but not limited to, the following: unanticipated impacts relating to novel coronavirus; no significant changes to applicable laws and regulations, including any tax and regulatory changes; no material adverse impacts to the investment and credit markets; and assumptions regarding our current strategy and priorities, including as it pertains to our growth strategy and relationship with TransAlta Renewables. The forward looking statements are subject to a number of risks and uncertainties that may cause actual performance, events or results to differ materially from those contemplated by the forward looking statements, which include: failure to satisfy the conditions to the closing of the transaction; changes in the market place in which the cogeneration facility is located; failure to proceed with the drop-down to TransAlta Renewables Inc.; changes to the operational characteristics of the off-takers under the long-term power purchase agreement; changes in the law or political developments; and other risk factors contained in the Company’s Annual Information Form and Management’s Discussion and Analysis for the year end dated December 31, 2019, filed under the Company’s profile with the Canadian securities regulators on www.sedar.com and the U.S. Securities and Exchange Commission on www.sec.gov. Readers are cautioned not to place undue reliance on this forward looking information, which is given as of the date it is expressed in this news release. The Company undertakes no obligation to update or revise any forward looking information except as required by law. For additional information on the assumptions made, and the risks and uncertainties which could cause actual results to differ from those in the forward looking information, refer to the Company’s Annual Report and Management’s Discussion and Analysis filed under the Company’s profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission at www.sec.gov.
TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors
TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that the Company, with its partner Tidewater Midstream & Infrastructure Ltd. (Tidewater), has entered into a Letter of Intent to sell the Pioneer Pipeline to NOVA Gas Transmission Ltd. (NGTL), a wholly-owned subsidiary of TC Energy, for a purchase price of CDN $255 million. As part of the transaction, NGTL intends to integrate the Pioneer Pipeline into its natural gas pipeline infrastructure in Alberta.
The benefits of the transaction to TransAlta include:
Access to NGTL’s highly liquid natural gas network and gas trading hub;
Additional reliability and flexibility of having two pipelines delivering natural gas to the Company’s power stations;
Access to a broad and diversified group of gas producers and resource basins; and
Cash proceeds that can be used to fund the Company’s natural gas conversion program, or for other purposes.
As part of the transaction, TransAlta will enter into long-term delivery transportation agreements with NGTL, bringing the total of new and existing natural gas pipeline transportation service to 400 TJ/day by 2023. TransAlta’s current commitments, including the 139 TJ/day with Tidewater, will remain in place until the closing of the transaction.
Tidewater has been an exceptional partner that was able to build the Pioneer Pipeline well ahead of schedule, allowing us to significantly reduce our carbon emissions and costs,- said Dawn Farrell, President and Chief Executive Officer of the Company. Going forward, we are excited to work with TC Energy to meet our transportation requirements as we continue to execute our clean energy strategy, which will support our goals as a leader in clean electricity generation.
The transaction is subject to entering into a Purchase and Sale Agreement, and customary regulatory approvals.
About TransAlta:
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. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydroelectric 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 has been recognized by CDP (formerly Climate Disclosure Project) as an industry leader on Climate Change Management. TransAlta is 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 its web site at transalta.com.
Cautionary Statement Regarding Forward Looking Information
This news release contains forward looking statements within the meaning of applicable securities laws. The use of any of the words expect, anticipate, continue, estimate, may, will, project, should, propose, plans, intends and similar expressions are intended to identify forward looking information or statements. More particularly, and without limitation, this news release contains forward looking statements and information relating to the Pioneer Pipeline; sale of the Pioneer Pipeline to NGTL; regulatory approvals; execution of the definitive agreements; NGTL’s intention to integrate the Pioneer Pipeline into its natural gas pipeline infrastructure in Alberta; the potential benefits of the transaction; and estimated natural gas pipeline transportation service with NGTL. These forward looking statements are based on a number of assumptions considered by the Company to be reasonable as of the date of this news release, including, but not limited to, the following: no significant changes to applicable laws and regulations, including any tax and regulatory changes; no significant changes to our relationship with Tidewater; and assumptions regarding our current strategy and priorities, including as it pertains to ournatural gas conversion program and the clean energy strategy. The forward looking statements are subject to a number of risks and uncertainties that may cause actual performance, events or results to differ materially from those contemplated by the forward looking statements, which include: disruptions in the source of fuels, including natural gas required for the natural gas conversions and repowering strategies; changes in economic and market conditions; changes in tax, environmental, regulatory and other laws and regulations; and other risks and uncertainties discussed in the Company’s materials filed with the Canadian securities regulatory authorities from time to time and as also set forth in the Company’s Management’s Discussion and Analysis dated December 31, 2019, filed under the Company’s profile with the Canadian securities regulators on www.sedar.com. Readers are cautioned not to place undue reliance on this forward looking information, which is given as of the date it is expressed in this news release. The Company undertakes no obligation to update or revise any forward looking information except as required by law.
