TransAlta Corporation to Acquire TransAlta Renewables Inc. to Simplify Structure and Enhance Strategic Position

Posted on by kevin_wick

TransAlta Corporation to Acquire TransAlta Renewables Inc. to Simplify Structure and Enhance Strategic Position

  • Business combination creates a unified, large-scale clean electricity leader to serve customers with clean and reliable electricity
  • Creates a single, publicly-traded entity with one strategy and a simplified governance structure that facilitates growth, and provides greater clarity around the execution of the Clean Electricity Growth Plan
  • The combined company enhances diversification, increases public float and trading liquidity, with attractive transaction metrics that unlocks value to the benefit of all shareholders
  • 10.99 per common share of TransAlta Renewables Inc. as of July 10, 2023
  • 1.0337 common shares of TransAlta Corporation or $13.00 in cash, subject to pro-rationing based on a maximum aggregate issuance of 46,441,779 common shares of TransAlta Corporation and maximum aggregate cash consideration of $800 million
  • A special committee of independent directors of TransAlta Renewables Inc., who conducted an independent and comprehensive review process, supported by the receipt of two fairness opinions, unanimously recommends that the shareholders of TransAlta Renewables Inc. vote in favour of the transaction

TransAlta Corporation (TSX: TA; NYSE: TAC) (“TransAlta”) and TransAlta Renewables Inc. (TSX: RNW) (“RNW”) today announced that they have entered into a definitive arrangement agreement (the “Agreement”) under which TransAlta will acquire all of the outstanding common shares of RNW (each, a “RNW Share”) not already owned, directly or indirectly, by TransAlta and certain of its affiliates, subject to the approval of RNW shareholders.

“With the execution of our Clean Electricity Growth Plan well underway, it is clear that the strategies of both TransAlta and RNW have converged. Now is the right time to bring these two companies together to create a single clean electricity leader. The combined company’s greater scale and enhanced positioning will drive benefits and unlock value for all of our shareholders.  The combination of the two companies will be underpinned by a single strategy that provides greater clarity to investors and will support future growth”,- said Mr. John Kousinioris, President and Chief Executive Officer of TransAlta.

“We are pleased to announce that this transaction provides RNW shareholders with an immediate premium and greater growth and cash flow certainty going forward. It resolves significant risks associated with maintaining RNW’s current dividend level given challenges with RNW’s cash available for distribution due to near-term contract expiries, significant increases to cash taxes and other factors”,- said Mr. David Drinkwater, Chair of the Board of Directors of RNW. “A special committee of independent directors of RNW undertook a comprehensive process with its own independent advisors to negotiate the Agreement to ensure fair value for RNW, and we are pleased to recommend this Agreement to our shareholders.”

Under the terms of the Agreement, each RNW Share will be exchanged for, at the election of each holder of RNW Shares (RNW Shareholders):

  • 1.0337 common shares of TransAlta (each, a “TransAlta Share”), or
  • $13.00 in cash.  

The consideration payable to RNW Shareholders is subject to pro-rationing based on a maximum aggregate number of TransAlta Shares that may be issued to RNW Shareholders of 46,441,779and a maximum aggregate amount of cash of $800 million. The transaction will be effected by way of an arrangement under the Canada Business Corporations Act (the “Arrangement”).  

The consideration payable to RNW Shareholders represents an 18.3% premium based on the closing price of RNW Shares on the Toronto Stock Exchange (TSX) as of July 10, 2023.The total consideration paid to RNW Shareholders is valued at $1,384,051,812 on July 10, 2023, of which $800 million will be paid in cash. The combined company will operate as TransAlta and remain listed on the TSX and the New York Stock Exchange (“NYSE”), under the symbols “TA” and “TAC”, respectively.  

Key Highlights and Rationale for Arrangement

The Arrangement provides shareholders of the combined company with a single strategy and a clear and compelling opportunity for long-term growth:

  • Alignment and Execution of a Single Strategy: The combined company will share a common strategic path to achieve its clean electricity growth objectives and be more competitive as a single, streamlined, publicly-listed entity. It will align, clarify and enhance management’s strategic focus and efforts in the marketing, development, construction, operation and maintenance of generation assets to serve customers with clean and reliable electricity.
  • Accretive Transaction and Attractive Dividend, while Supporting Future Growth: Following the transaction, shareholders of the combined company will benefit from an accretive transaction and receive a sustainable quarterly dividend while ensuring the combined company retains sufficient cash flow for reinvestment in future growth projects. 
  • Direct Ownership in One of Canada’s Largest Independent Power Producers: The combined company will have unified and direct ownership interests in a diversified portfolio of wind, hydro, solar, storage and natural gas generation assets, all backed by an aligned strategy that allows shareholders of the combined company to benefit from future growth.
  • Increased Scale, Public Float and Liquidity: The combined company will have a larger market capitalization and will provide stronger access to capital markets while providing increased trading liquidity. The reduced corporate complexity will provide greater transparency and understanding of the combined company’s business, which is expected to enable investment in TransAlta’s growing clean electricity portfolio.
  • Synergies: The combined company will benefit from greater efficiencies and corporate synergies under a single entity.The combined company will create opportunities for further capital efficiencies by funding growth in a single simplified entity, providing a higher retention of cash flows, and resulting in lower corporate and administration costs.

Benefits to RNW Shareholders

The transaction offers RNW Shareholders a compelling investment proposition and is expected to provide the following benefits:

  • Fair Offer Reflecting Attractive Premium: The terms of the offer represent an 18.3% premium based on the closing price of RNW Shares on the TSX as of July 10, 2023, and a 13.6% premium relative to RNW’s 20-day volume-weighted average price per share as of July 10, 2023. 
  • Clear and Sustainable Path Going Forward: The combined company will provide resilience and mitigate near-term risks associated with maintaining RNW’s current dividend level given its challenges with contract expiries and increased cash taxes.  This combined company will provide stronger dividend sustainability and payout coverage, and it will be better positioned to realize growth as compared to RNW as a standalone entity.  
  • Expanded Pool of Assets: The combined company will offer an expanded pool of assets and business capabilities.  RNW Shareholders who elect to receive TransAlta shares as consideration will become owners of TransAlta’s high-quality Alberta assets, which total 3.3 GW in the combined company.  It will also provide exposure to TransAlta’s energy marketing division that delivers industry-leading trading capability and market insights to generate strong cash flows driving further portfolio diversification.
  • Simplified Structure and Synergies: The simplified structure provides clarity of ownership and enhanced transparency, including through the elimination of tracking shares, which will enhance the investment analysis and decision-making process for investors. The combined company will also optimize the use of capital to fund growth more efficiently as compared to RNW as a standalone entity.
  • Immediate Exposure to Alberta Electricity Market: RNW Shareholders will benefit from upside due to the current strong power price environment in Alberta and TransAlta’s position in the Alberta market to generate significant cash flows through the capabilities and expertise of TransAlta’s leading asset optimization team, while continuing to benefit from a strong underlying base of contracted cashflows.
  • Enhanced Growth Opportunities: RNW Shareholders who elect to receive TransAlta Shares as consideration will be able to directly participate in the benefits of the combination including a consolidated development pipeline of 4.3 GW of clean electricity projects and early-stage investments in new technologies, along with access to business development expertise and innovation capabilities to enhance growth potential that will support capital appreciation.

Benefits to TransAlta Shareholders

The Arrangement is strategically and economically attractive to holders of TransAlta Shares (TransAlta Shareholders) and provides the following benefits:

  • Enhanced Strategic Position: The combined company will leverage scale, assets and capabilities in all markets, while retaining greater exposure to the growth in clean electricity opportunities. The Arrangement will provide economic contribution from an incremental 1,187 MW of generating capacity, being 39.9% of the generating capacity at RNW not currently owned by TransAlta (directly or indirectly).  The Arrangement also increases the proportion of TransAlta’s contractedness and diversifies the impact of TransAlta’s merchant market exposure.
  • Sustainable, Attractive Transaction Metrics:  The Arrangement is accretive to free cash flow and provides greater financial flexibility by increasing the retention of cash, which will support the combined company’s growth plan.  
  • Execution of a Single Strategy:  The Arrangement provides clarity and will result in the execution of a single strategy.  All future growth will be pursued in the combined company and funded with greater capital efficiency, while the combined company retains access to future growth in contracted opportunities.
  • Increased Liquidity and Synergies: The combined company will have an increased public float and trading liquidity, and have access to more efficient capital, along with corporate synergies.
  • Maintains Financial Strength: The simplified structure and funding of the Arrangement is expected to have a neutral impact to the credit rating of TransAlta.

Additional Information on the Arrangement

TransAlta owns 160,398,217 RNW Shares, representing approximately 60.1% of the outstanding RNW Shares. As a result of the Arrangement, TransAlta would issue an estimated 46,441,779 TransAlta Shares, representing approximately 15% of the total number of outstanding TransAlta Shares.

The Arrangement is subject to the approval by: (i) 66 2/3% of the votes cast by RNW Shareholders present in person or by proxy at a special meeting of RNW Shareholders (the “RNW Meeting”) called to consider the Arrangement; and (ii) a majority of the votes cast by RNW Shareholders present in person or by proxy at the RNW Meeting after excluding the votes attached to RNW Shares that, to the knowledge of RNW and its directors and senior officers, after reasonable inquiry, are beneficially owned or over which control or direction is exercised by TransAlta, the directors and senior officers of TransAlta, any TransAlta Shareholder holding more than 10% of the issued and outstanding TransAlta Shares and any other person who is an “interested party” or a “related party” of an “interested party” in relation to RNW with respect to the Arrangement within the meaning of Canadian securities laws.

The exchange of RNW Shares for TransAlta Shares will generally be tax deferred, while the exchange of RNW Shares for cash will generally be a taxable disposition, in each case, for Canadian income tax purposes. Any RNW Shareholder who receives a combination of TransAlta Shares and cash for its RNW Shares will be able to file a joint tax election that may, depending on the RNW Shareholders’ own circumstances, allow for the exchange of its RNW Shares to occur on a fully tax-deferred basis for Canadian income tax purposes.

The Agreement provides for, among other things, a non-solicitation covenant of RNW, subject to a customary “fiduciary out” provision that entitles RNW to consider and accept a superior proposal if TransAlta does not match the superior proposal within a five-business day period. If the Agreement is terminated in certain circumstances, including if RNW enters into an agreement with respect to a superior proposal, TransAlta is entitled to a termination payment of $95.4 million. 

In addition to the required approvals of RNW Shareholders, closing of the Arrangement is also subject to obtaining the approval of the Court of King’s Bench of Alberta, required regulatory approvals and other customary closing conditions.

Further details regarding the Arrangement will be contained in a management information circular (“the Circular”) for the RNW Meeting to be sent to RNW Shareholders in connection with the RNW Meeting. The Circular is expected to be mailed on or about August 25, 2023, and the RNW Meeting is expected to be held on or about September 26, 2023.

If all approvals are received and other closing conditions satisfied, the Arrangement is expected to be completed early in the fourth quarter of 2023.

Copies of the Agreement will be filed by TransAlta with the U.S. Securities and Exchange Commission and the Canadian securities regulators and will be available for viewing at www.sec.gov and www.sedar.com. The Circular, as well as other filings containing information about the Arrangement including the Agreement, will also be available for viewing under RNW’s profile on www.sedar.com. All RNW Shareholders are urged to read the Circular once available as it will contain additional important information concerning the Arrangement.

Support for the Arrangement

The Arrangement is the result of an independent and comprehensive review process. The Board of Directors of RNW (the “RNW Board”) delegated to a special committee consisting solely of independent directors of RNW (the “RNW Special Committee”) the authority to, among other things, review, evaluate and negotiate the Arrangement on behalf of RNW.

National Bank Financial Inc. (NBF) and TD Securities Inc. (TD), acting as independent financial advisors to the RNW Special Committee, have each provided their verbal opinions to the RNW Special Committee (subject to certain assumptions and qualifications) that the Arrangement is fair from a financial point of view to the RNW Shareholders (the “RNW Opinions”) without consideration to TransAlta and any affiliate thereof. NBF has also prepared a formal valuation of the RNW Shares (the “Formal Valuation”), and based upon their analysis and subject to the various assumptions, qualifications, and limitations to be set forth in its written valuation report, in addition to other factors that it considered relevant, the fair market value of a RNW Share as of July 10, 2023 was in the range of $12.25 and $13.60. The RNW Special Committee, after considering the terms of the Arrangement, the RNW Opinions, the Formal Valuation, advice of its independent financial and legal advisors and other relevant matters, recommended to the RNW Board that it determine that the Arrangement is in the best interests of RNW and fair to RNW Shareholders (without consideration to TransAlta and any affiliate thereof), approve the execution and delivery of the Agreement and recommend that RNW Shareholders vote in favour of the Arrangement.  

After considering, among other things, the recommendation of the RNW Special Committee and its receipt of the RNW Opinions and the Formal Valuation, the RNW Board (with four directors who are not independent abstaining) unanimously determined that the Arrangement is in the best interests of RNW and is fair to the RNW shareholders (without consideration to TransAlta and any affiliate thereof), approved the execution and delivery of the Agreement and unanimously recommends that RNW Shareholders vote in favour of the Arrangement.    

RBC Dominion Securities Inc. (RBC Capital Markets), acting as financial advisor to TransAlta, provided a verbal opinion, as of July 10, 2023, to the Board of Directors of TransAlta (subject to assumptions and qualifications) that the consideration to be paid by TransAlta pursuant to the Arrangement is fair from a financial point of view to TransAlta (the “TransAlta Fairness Opinion”). After considering, among other things, the TransAlta Fairness Opinion, the TransAlta Board determined that the Arrangement is in the best interests of TransAlta and approved the execution and delivery of the Agreement.    

All of the directors of RNW have entered into support agreements with TransAlta pursuant to which they have agreed to vote their respective RNW Shares in favour of the Arrangement at the RNW Meeting. Additionally, TransAlta, holding approximately 60.1% of the RNW Shares, intends to vote its RNW Shares in favour of the Arrangement at the RNW Meeting.

Investor Call

A conference call with the investment community will take place on July 11 at 9:00 a.m. MST (11:00 a.m. EST). The call will begin with a short address by John Kousinioris, President and Chief Executive Officer, and Todd Stack, President of TransAlta Renewables and Executive Vice President, Finance and Chief Financial Officer of TransAlta, followed by a question-and-answer period for analysts and media.

Dial-in number TransAlta Corporation Acquires TransAlta Renewables Conference Call

Toll-free North American participants call: 1-888-664-6392

A link to the live webcast will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/ and on the Investors section of TransAlta Renewable’s website at https://transaltarenewables.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 181225 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s and RNW’s website once it becomes available.

Additional Information Relating to the Transaction

TransAlta’s website includes details of the transaction at www.transalta.com/RNWacquisition. Details of the transaction may also be accessed through the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/.

Advisors

RBC Capital Markets is acting as financial advisor to TransAlta. Norton Rose Fulbright Canada LLP is acting as legal advisor to TransAlta.

NBF and TD are acting as financial advisors to the RNW Special Committee. Stikeman Elliott LLP is acting as legal advisor to the RNW Special Committee.

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 111 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 its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

For more information about TransAlta, visit our website at transalta.com.

About TransAlta Renewables Inc.

TransAlta Renewables Inc. is among the largest of any publicly traded renewable independent power producers (IPP) in Canada. TransAlta Renewables’ asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 26 wind facilities, 11 hydroelectric facilities, eight natural gas generation facilities, two solar facilities, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,965 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania, New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, Washington, North Carolina, and the State of Western Australia.

For more information about RNW, visit its website at transaltarenewables.com.

Additional Disclosures

This press release does not constitute an offer to buy or sell or the solicitation of an offer to sell or buy any securities. Any offers, solicitations or offers to buy, or any sales of securities will be made in accordance with registration and other requirements under applicable law.

Cautionary Note Forward-Looking Statements

This news release contains “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”). Forward-looking statements are predictive in nature, depend upon or refer to future events or conditions, or include words such as “expects”, “plans”, “estimates”, “intends”, “targets”, “result”, “future” or negative versions thereof and other similar expressions or future or conditional verbs such as “may”, “can”, “will”, and “would”. These statements may include, without limitation, statements regarding: expectations with respect to the business, financial prospects and future opportunities for the combined company, including its broader platform with enhanced diversification and simplified governance structure; the combined company’s stronger access to capital markets; the complementary nature of the combined company’s asset base and that the combined company will share a common strategic path; increased competitiveness of the combined company; enhancement of management’s efforts in serving customers with low-cost clean electricity; increased trading liquidity of the combined company’s shares and that such shares will remain listed on the TSX and the NYSE; the combined company’s enhanced access to operational, tax and corporate synergies; the combined company’s dividend plans following closing of the Arrangement; the expected benefits of the Arrangement to the RNW Shareholders, including stronger dividend sustainability, directly participating in the upside of TransAlta’s development pipeline of renewable energy projects and other corporate synergies; the expected benefits of the Arrangement to TransAlta Shareholders, including that the combined company will leverage scale, assets and capabilities in all markets, that the transaction is expected to be accretive to free cash flow, all future growth will be pursued in the combined company and funded with greater capital efficiency, and greater access to contracted cash flows through the acquisition of the remaining 39.9% interest of RNW; the expectation that the transaction will have a neutral impact to TransAlta’s credit rating; the tax implications of the Arrangement and the ability of a RNW Shareholder to file a joint tax election; the anticipated date of the RNW Meeting, the Circular sent in connection therewith and the expected mailing date thereof; the anticipated closing conditions and regulatory approvals pursuant to the Agreement; and the anticipated timing and completion of the Arrangement, including the expected closing date of the Arrangement.

Forward-looking statements are based upon, among other things, factors, expectations and assumptions that TransAlta and RNW have made as at the date of this news release regarding, among other things: the satisfaction of the conditions to closing of the Arrangement in a timely manner, if at all, including the receipt of all necessary approvals; the combined company’s ability to successfully integrate the businesses of TransAlta and RNW; TransAlta’s ability to issue TransAlta Shares pursuant to the Arrangement; sources of funding that each of TransAlta and RNW have relied upon in the past continue to be available to the combined company on terms favourable to the combined company; the combined company will have access to sufficient capital to pursue future development plans; there will be increases to the combined company’s share price and market capitalization over the long term; and that the combined company will have the ability to return capital to its shareholders.

Forward-looking statements involve significant known and unknown risk and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether such results will be achieved. These risks include, but are not limited to: the completion and timing of the Arrangement; the ability of TransAlta and RNW to receive, in a timely manner, the necessary regulatory, court, shareholder, stock exchange and other third-party approvals and to satisfy the other conditions to closing of the Arrangement; the ability of the parties to complete the Arrangement on the terms contemplated by TransAlta and RNW or at all; the ability of the combined company to realize the anticipated benefits of, and synergies and savings from, the Arrangement; consequences of not completing the Arrangement, including the volatility of the share prices of TransAlta and RNW, negative reactions from the investment community, and the required payment of certain costs related to the termination of the Arrangement; the accuracy of the pro forma financial information of the combined company; and the focus of management’s time and attention on the Arrangement and other disruptions arising from the Arrangement.  Additional risk factors relating to TransAlta and RNW are described in further detail in TransAlta’s management’s discussion and analysis and annual information form for the year ended December 31, 2022, and in RNW management’s discussion and analysis and annual information form for the year ended December 31, 2022, and in TransAlta’s management’s discussion and analysis and RNW’s management discussion analysis, each for the three months ended March 31, 2023, which are available on SEDAR at www.sedar.com. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta and RNW’s expectations only as of the date of this news release, as a number of factors could cause actual results to differ materially from the results discussed in these forward-looking statements. TransAlta and RNW disclaim 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.

The TSX and NYSE have not reviewed and do not accept responsibility for the adequacy or accuracy of this release. No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.

For Further Information Please Contact:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries:
Phone: 1-855-255-9184 Email: [email protected]

Media Advisory: TransAlta and TransAlta Renewables Second Quarter 2023 Results and Conference Call

Posted on by Ben Harris

Media Advisory: TransAlta and TransAlta Renewables Second Quarter 2023 Results and Conference Call

TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will release its second quarter 2023 results before markets open on Friday, August 4, 2023. 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.

TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) will release its second quarter 2023 results before markets open on Thursday, August 3, 2023. Any questions regarding TransAlta Renewables may be asked on the TransAlta conference call.

Second Quarter 2023 Conference Call:

Toll-free North American participants call: 1-888-664-6392
 Webcast link: https://app.webinar.net/QZL0W2G3RdB

Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 650793 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.

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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

For more information about TransAlta, visit its website at transalta.com.

About TransAlta Renewables Inc.:

TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (IPP) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 26 wind facilities, 13 hydroelectric facilities, eight natural gas generation facilities, two solar facilities, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,968 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania, New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, North Carolina, Washington and the State of Western Australia.

For more information about TransAlta Renewables, visit its web site at transaltarenewables.com.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries:
Phone: 1-855-255-9184 Email: [email protected]

TransAlta Renews Normal Course Issuer Bid

Posted on by Ben Harris

TransAlta Renews Normal Course Issuer Bid

TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today 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 7.29% of its public float of Common Shares, where the aggregate €œpublic float€ (as defined by the TSX) as at May 17, 2023, was 192,048,191 Common Shares. 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 31, 2023 and ends on May 30, 2024 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 150,222 Common Shares (being 25% of the average daily trading volume on the TSX of 600,891 Common Shares for the six months ended April 30, 2023) 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. As at May 17, 2023, there were 263,330,038 Common Shares issued and outstanding.

TransAlta has repurchased and cancelled 8,549,500 Common Shares on the open market through the facilities of the TSX and/or alternative Canadian trading systems at an average price of $11.86 per share under its prior NCIB approved by the TSX on May 24, 2022 for the twelve-month period commencing May 31, 2022.

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 the Common Shares does not reflect their 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 hydro-electric power. For over 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

For more information about TransAlta, visit its website at transalta.com.

Cautionary Statement Regarding Forward-looking Information:

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   €œmay€, €œwill€,  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 unless otherwise indicated.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries:
Phone: 1-855-255-9184 Email: [email protected]

TransAlta Reports First Quarter 2023 Results and Raises 2023 Financial Guidance

Posted on by kevin_wick

TransAlta Reports First Quarter 2023 Results and Raises 2023 Financial Guidance

First Quarter 2023 Financial Highlights

  • Adjusted EBITDA(1),(2) of $503 million, an increase of 94% over the same period in 2022
  • Free Cash Flow (“FCF”)(1) of $263 million, or $0.98 per share, an increase of 145% on a per-share basis from the same period in 2022
  • Earnings before income taxes of $383 million, an improvement of $141 million from the same period in 2022
  • Net earnings attributable to common shareholders of $294 million, an increase of $108 million from the same period in 2022
  • Cash flow from operating activities of $462 million, an increase of 2% from the same period in 2022

Other Business Highlights

  • Returned $36 million of capital to common shareholders through share buybacks of 3.2 million common shares
  • Entered into an automatic share purchase plan to facilitate repurchases of common shares through the normal course issuer bid during blackout periods
  • Announced agreement to acquire a 50% interest in a 320 MW early-stage pumped hydro development project
  • Kent Hills rehabilitation program on track with 13 turbines reassembled and commissioning commenced in late April
  • Garden Plain construction nearing completion with all turbines assembled and commercial operations to commence during the second quarter of 2023
  • Northern Goldfields construction nearing completion with commercial operations to commence during the second quarter of 2023
  • Mount Keith 132kV expansion project construction activities have commenced and are on track to be completed in latter half of 2023

2023 Revised Outlook

  • Increased 2023 annual financial guidance as set out below:
    • Adjusted EBITDA range of $1.45 billion to $1.55 billion, an increase of 19% at the midpoint of prior guidance
    • FCF range of $650 million to $750 million, an increase of 15% at the midpoint of prior guidance
    • Energy Marketing gross margin range of $130 million to $150 million, an increase of 40% at the midpoint of prior guidance

TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the three months ended March 31, 2023.

“Our first quarter results continue to demonstrate the value of our strategically diversified fleet. Our results benefited from our strong operations and asset optimization and hedging activities. With our performance across the fleet and our continuing positive expectations for the balance of year, we have revised our 2023 full year financial guidance upwards for both adjusted EBITDA and free cash flow, with revised midpoints exceeding the top end of our original targets to reflect stronger market conditions and solid operational performance,” said John Kousinioris, President and Chief Executive Officer of TransAlta. 

“We continue to advance our growth plan and are progressing several opportunities with 374 MW of projects in an advanced stage of development. Our progress is on track, and the cash flows from our legacy fleet are positioning us well to realize our Clean Electricity Growth Plan,” added Mr. Kousinioris.

Key Business Developments

Automatic Share Purchase Plan

On March 27, 2023, the Company entered into an automatic share purchase plan (ASPP) in order to facilitate repurchases of TransAlta’s common shares under its previously announced normal course issuer bid (NCIB). The Company has received approval from the Toronto Stock Exchange to purchase up to 14,000,000 common shares during the 12-month period that commenced May 31, 2022 and terminates May 30, 2023, representing approximately 5.2 per cent of the Company’s currently issued and outstanding Common Shares as at Dec. 31, 2022.

Under the ASPP, the Company’s broker may purchase common shares from the effective date of the ASPP until the end of the NCIB. All purchases of common shares made under the ASPP will be included in determining the number of common shares purchased under the NCIB. Any common shares purchased by the Company pursuant to the NCIB will be cancelled. The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (ii) the NCIB expires; or (iii) the Company terminates the ASPP in accordance with its terms.  

During the three months ended March 31, 2023, the Company purchased and cancelled a total of 3,169,300 common shares at an average price of $11.23 per common share, for a total cost of $36 million.

Early-Stage Pumped Hydro Development Project

On Feb. 16, 2023, the Company entered into a definitive agreement to acquire a 50 per cent interest in the Tent Mountain Renewable Energy Complex (Tent Mountain), an early-stage 320 MW pumped hydro energy storage development project, located in southwest Alberta, owned by Montem Resources Limited (Montem). The acquisition includes the land rights, fixed assets and intellectual property associated with the pumped hydro development project. The transaction closed on April 24, 2023. The Company paid Montem approximately $8 million on closing of the transaction and additional contingent payments of up to $17 million (approximately $25 million total) may become payable to Montem based on the achievement of specific development and commercial milestones. The Company and Montem own the Tent Mountain project within a special purpose partnership that is jointly managed, with the Company acting as project developer. The partnership is actively seeking an offtake agreement for the energy and environmental attributes generated by the facility.

Kent Hills Wind Facilities Update

Rehabilitation of the Kent Hills 1 and 2 wind facilities is well underway. All of the towers have been fully disassembled with foundation demolition and removal nearing completion. Construction of new foundations is progressing well, with approximately two-thirds of foundations poured. Tower reassembly is also progressing with 13 turbines reassembled to date and associated commissioning activities commenced. We continue to target returning all turbines to service in the second half of 2023. The current estimate of the capital expenditures is approximately $120 million, inclusive of insurance proceeds.

During the first quarter of 2023, the Company filed and served a statement of claim in the New Brunswick Court of King’s Bench against certain defendants who the Company believes are responsible for, or contributed to, the failure of the turbine foundations at the Kent Hills 1 and 2 wind facilities. The claim seeks damages for lost profits, replacement costs, and other related costs to perform the remediation of Kent Hills 1 and 2, net of any insurance recoveries. The ability to recover any amounts is uncertain at this time.

First Quarter 2023 Highlights

 $ millions, unless otherwise stated

Three Months Ended

March 31, 2023

March 31, 2022

Adjusted availability (%)

92.0

89.1 

Production (GWh)

5,972

5,359

Revenues

1,089

735 

Adjusted EBITDA(1),(2)

503

259

FFO(1),(2)

374

179 

FCF(1),(2)

263

108 

Earnings before income taxes

383

242

Net earnings attributable to common shareholders

294

186 

Cash flow from operating activities

462

451 

Net earnings per share attributable to common shareholders, basic and diluted

1.10

0.69

FFO per share(1),(3)

1.40

0.66

FCF per share(1),(3)

0.98

0.40
Download the full news release

TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors

Posted on by Ben Harris

TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors

CALGARY, Alberta (April 28, 2023) TransAlta Corporation (TSX: TA) (NYSE: TAC) (“TransAlta” or the “Company”) held its Annual and Special Meeting of Shareholders (the Meeting) on April 28, 2023.  The total number of common shares represented by shareholders at the Meeting and by proxy was 151,051,401, representing 56.49 per cent of the Company’s outstanding common shares.

The following resolutions were considered by shareholders:

Election of Directors 

The thirteen director nominees proposed by management were elected.  The votes by ballot were received as follows:

NomineeVotes ForPer centWithheldPer cent
Rona H. Ambrose148,554,41299.33%1,009,2600.67%
John P. Dielwart149,100,35399.69%463,3200.31%
Alan J. Fohrer148,745,93499.45%817,7380.55%
Laura W. Folse148,974,62199.61%589,0500.39%
Harry A. Goldgut149,070,66099.67%493,0120.33%
John H. Kousinioris149,135,40299.71%428,2710.29%
Candace J. MacGibbon138,099,84392.34%11,463,8297.66%
Thomas M. O’Flynn136,442,01891.23%13,121,6558.77%
Bryan D. Pinney148,707,76399.43%855,9090.57%
James Reid149,129,75899.71%433,9150.29%
Manjit K. Sharma149,024,49899.64%539,1740.36%
Sandra R. Sharman148,064,04799.00%1,499,6241.00%
Sarah A. Slusser149,092,99499.69%470,6770.31%

Appointment of Auditors 

The appointment of Ernst & Young LLP to serve as the auditors for 2023 was approved.  The votes by ballot were received as follows:

Votes ForPer centWithheldPer cent
138,102,73691.43%12,948,5648.57%

Advisory Vote on Executive Compensation (also known as €œsay-on-pay)

The advisory vote on the Company’s approach to executive compensation or say-on-pay was approved.  The votes by ballot were received as follows:

Votes ForPer centWithheldPer cent
143,910,54996.22%5,653,1223.78%

Increase of Shares Issuable Under the Share Unit Plan

The resolution approving the Company’s increase of shares issuable under the Share Unit Plan was approved.  The votes by ballot were received as follows:

Votes ForPer centWithheldPer cent
148,519,29098.32%2,532,1061.68%

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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

For more information about TransAlta, visit its website at transalta.com.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]

TransAlta Declares Dividends

Posted on by Ben Harris

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) declared a quarterly dividend of $0.055 per common share payable on July 1, 2023 to shareholders of record at the close of business on June 1, 2023.

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, 2023 up to but excluding June 30, 2023:

Preferred SharesTSX Stock SymbolDividend RateDividend Per ShareRecord
Date		Payment
Date
Series ATA.PR.D2.877%$0.17981June 1, 2023June 30, 2023
Series B*TA.PR.E6.594%$0.41100June 1, 2023June 30, 2023
Series CTA.PR.F5.854%$0.36588June 1, 2023June 30, 2023
Series D*TA.PR.G7.664%$0.47769June 1, 2023June 30, 2023
Series ETA.PR.H6.894%$0.43088June 1, 2023June 30, 2023
Series GTA.PR.J4.988%$0.31175June 1, 2023June 30, 2023

*Please note the quarterly floating rate on the Series B and Series D 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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

For more information about TransAlta, visit its website at transalta.com.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]

Media Advisory: TransAlta and TransAlta Renewables Annual Meetings of Shareholders and First Quarter 2023 Results and Conference Call

Posted on by Ben Harris

TransAlta Corporation Announces Results of the Annual and Special Meeting of Shareholders and Election of all Directors

2023 Annual Meeting of TransAlta Corporation Shareholders

On Friday, April 28, 2023, TransAlta Corporation (TransAlta) (TSX: TA) (NYSE: TAC) will hold its annual meeting of shareholders at 12:30 p.m. Mountain Time (2:30 p.m. ET) in a virtual-only meeting format via live audio webcast. The management proxy circular (available at https://transalta.com/investors/results-reporting/) provides detailed information about the business of the meeting and the voting process. TransAlta will only conduct the formal business of the meeting and there will not be a management presentation following the formal business of the meeting.      

2023 Annual Meeting of TransAlta Renewables Inc. Shareholders

On Thursday, May 4, 2023, TransAlta Renewables Inc. (TransAlta Renewables) (TSX:RNW) will hold its annual meeting of shareholders at 10:00 a.m. Mountain Time (12:00 p.m. ET) in a virtual-only meeting format via live audio webcast. The management proxy circular (available at https://transaltarenewables.com/investors/results-reporting/) provides detailed information about the business of the meeting and the voting process. TransAlta Renewables will only conduct the formal business of the meeting and there will not be a management presentation following the formal business of the meeting.  

Q1 2023 Earnings Release, Conference Call and Webcast

TransAlta and TransAlta Renewables will release their first quarter 2023 results before markets open on Friday, May 5, 2023. 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.

Any questions regarding TransAlta Renewables may be asked on the TransAlta conference call.

First Quarter 2023 Conference Call:

Toll-free North American participants call: 1-888-664-6392
 Webcast link: https://app.webinar.net/lGjLRb41wr2

Related materials will be available on the Investor Centre section of TransAlta’s website at https://transalta.com/investors/presentations-and-events/. If you are unable to participate in the call, the instant replay is accessible at 1-888-390-0541 (Canada and USA toll free) with TransAlta pass code 337489 followed by the # sign. A transcript of the broadcast will be posted on TransAlta’s website once it becomes available.

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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has been recognized by CDP with an ‘A-‘ rating. TransAlta has achieved a 61 per cent reduction in GHG emissions since 2015.

For more information about TransAlta, visit its website at transalta.com.

About TransAlta Renewables Inc.:

TransAlta Renewables is among the largest of any publicly traded renewable independent power producers (“IPP”) in Canada. Our asset platform and economic interests are diversified in terms of geography, generation and counterparties and consist of interests in 26 wind facilities, 11 hydroelectric facilities, eight natural gas generation facilities, two solar facilities, one natural gas pipeline, and one battery storage project, representing an ownership interest of 2,965 megawatts of owned generating capacity, located in the provinces of British Columbia, Alberta, Ontario, Québec, New Brunswick, the States of Pennsylvania,  New Hampshire, Wyoming, Massachusetts, Michigan, Minnesota, Washington, North Carolina, and the State of Western Australia. For more information about TransAlta Renewables, visit its web site at transaltarenewables.com.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries: Toll-free media number: 1-855-255-9184 Email: [email protected]

TransAlta Corporation Enters into Automatic Share Purchase Plan

Posted on by kevin_wick

TransAlta Corporation Enters into Automatic Share Purchase Plan

TransAlta Corporation. (TransAlta€ or the €œCompany€) (TSX: TA) (NYSE: TAC) announced today that it has entered into an automatic share purchase plan (ASPP) with a broker in order to facilitate repurchases of TransAlta’s common shares (the €œCommon Shares) under its previously announced normal course issuer bid (NCIB).  

The Company previously announced that it had received approval from the Toronto Stock Exchange (TSX) to purchase up to 14,000,000 of its Common Shares, representing approximately 5.2% of the Company’s currently issued and outstanding Common Shares, during the 12-month period that commenced May 31, 2022 and terminates May 30, 2023. 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. Since the beginning of the NCIB on May 31, 2022, the Corporation has purchased 5,518,000 Common Shares at a weighted average price per Common Share of $11.85 for an aggregate value of $65,401,768. Purchases under the current plan include 2,575,700 Common Shares purchased in 2023 at a weighted average price per Common Share of $11.18 for an aggregate value of $28,802,633.  

The Company believes that the prevailing price for the Common Shares may not, from time to time, reflect the underlying value of the Common Shares and that the purchase of Common Shares pursuant to the NCIB may be an attractive and appropriate use of available funds relative to other alternatives. The ASPP will facilitate purchases under the NCIB as it will allow for purchases of Common Shares to be made at times when the Company would ordinarily not be permitted to make purchases, whether due to regulatory restriction or customary self-imposed blackout periods. TransAlta is committed to enhancing shareholder returns through appropriate capital allocation such as a share buyback and its quarterly dividend, which are underpinned by the Company’s strong free cash flow position.

Under the ASPP, the Company’s broker may purchase Common Shares from the effective date of the ASPP until the end of the NCIB. The ASPP will facilitate purchases of Common Shares under the NCIB by authorizing the Company’s broker to make purchases at its sole discretion based on parameters set by the Company in accordance with TSX rules, applicable law and the terms of the ASPP. Outside of periods that the Company is restricted from purchasing Common Shares pursuant to insider trading rules or its own internal trading blackout policies, Common Shares may also be purchased based on management’s discretion, in compliance with TSX rules and applicable law. 

All purchases of Common Shares made under the ASPP will be included in determining the number of Common Shares purchased under the NCIB. Any Common Shares purchased by the Company pursuant to the NCIB will be cancelled. The Company is not currently restricted from purchasing Common Shares pursuant to any insider trading rules or its own internal trading blackout policies. The ASPP has been pre-cleared by the TSX and will be effective on or before April, 1, 2023.  

The ASPP will terminate on the earliest of the date on which: (a) the maximum purchase limits under the ASPP are reached; (ii) the NCIB expires; or (iii) the Company terminates the ASPP in accordance with its terms.   

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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 68 per cent reduction in GHG emissions or 22 million tonnes since 2015 and has received scores of A- from CDP and A from MSCI.

Cautionary Statement Regarding Forward-looking Information:

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 €œmay€ or €œwill€, 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 and ASPP and the purchase of Common Shares thereunder, including any enhancement to shareholder returns. These statements are based on TransAlta’s beliefs 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: 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 unless otherwise indicated.

For more information:

Investor Inquiries:
Phone: 1-800-387-3598 in Canada and U.S. Email: [email protected]		Media Inquiries: Phone: 1-855-255-9184 Email: [email protected]

TransAlta Reports Fourth Quarter and Full Year 2022 Results and Commits to Net-Zero by 2045

Posted on by kevin_wick

TransAlta Reports Fourth Quarter and Full Year 2022 Results and Commits to Net-Zero by 2045

Fourth Quarter 2022 Financial Highlights

  • Adjusted EBITDA(1),(2) of $541 million, an increase of 123% over the same period in 2021
  • Free Cash Flow (“FCF”)(1) of $315 million, or $1.17 per share, an increase of 303% on a per-share basis from the same period in 2021
  • Earnings before income taxes of $7 million, an improvement of $39 million from the same period in 2021
  • Cash flow from operating activities of $351 million, an increase of 550% from the same period in 2021

Full Year 2022 Financial Highlights

  • Adjusted EBITDA(1),(2) of $1.63 billion, an increase of 27% from the same period in 2021
  • FCF(1) of $961 million or $3.55 per share, an increase of 64% on a per-share basis from the same period in 2021
  • Earnings before income taxes of $353 million, an increase of $733 million from 2021
  • Cash flow from operating activities of $877 million, a decrease of 12% from the same period in 2021

Other Business and ESG Highlights

  • Announced over 200 MW of renewable growth projects, including the Horizon Hill wind facility and Mount Keith 132kV transmission expansion, securing 40% of our 5-year 2 GW Clean Electricity Growth Plan target
  • Completed and executed contract renewals with our customers at the Sarnia Regional Cogeneration Plant (“Sarnia”), including the Ontario Independent Electricity System Operator (IESO)
  • Announced a 10-year contract extension at the Kent Hills wind facility with New Brunswick Power Corporation (“NB Power”) and advanced rehabilitation efforts, with the facility expected to fully return to service in the second half of 2023. The parties have also agreed to evaluate the installation of a battery energy storage system and potential repowering at the facilities end of life in 2045
  • Announced agreement to acquire a 50% interest in a 320 MW early-stage pumped hydro development project
  • Reduced annual carbon emissions by 2.3 million tonnes, an 18% reduction compared to 2021
  • Accelerated our business transformation to become net-zero by 2045
  • Received ESG ratings of ‘A-‘ with CDP (formerly known as the Carbon Disclosure Project) and ‘A’ with MSCI (Morgan Stanley Capital International)
  • Achieved a strong safety performance, including a record Total Recordable Injury Frequency of 0.39
  • Increased the common share dividend by 10% to an annualized dividend of $0.22 per share
  • Returned $54 million of capital to common shareholders during the year through share buybacks of 4.3 million common shares

TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) today reported its financial results for the fourth quarter and full year ended Dec. 31, 2022.

“2022 was a remarkable year for TransAlta, with results that exceeded the top end of our adjusted EBITDA and Free Cash Flow guidance. We achieved exceptional financial performance from all our generation segments, as well as our Energy Marketing segment. On the growth front, we secured over 200 MW of renewables growth projects bringing the total under our Clean Electricity Growth Plan to 800 MW or 40 per cent of our 2 GW target.  During the year, we also added 1,980 MW of development opportunities to our pipeline and currently have 374 MW of projects in an advanced stage of development,- said John Kousinioris, President and Chief Executive Officer. “Our evolution is on track, and the cash flows from our legacy fleet are positioning us well to transition our business towards contracted renewables,” added Mr. Kousinioris.

Key Business Developments

Early-Stage Pumped Hydro Development Project

On Feb. 16, 2023, the Company announced that it had entered into a definitive agreement to acquire a 50 per cent interest in the Tent Mountain Renewable Energy Complex (Tent Mountain), an early-stage 320 MW pumped hydro energy storage development project, located in southwest Alberta, currently owned by Montem Resources Limited (Montem). The acquisition includes the land rights, fixed assets and intellectual property associated with the pumped hydro development project. The Company will pay Montem approximately $8 million upon closing the transaction with additional contingent payments of up to $17 million (approximately $25 million total) based on the achievement of specific development and commercial milestones. The Company and Montem will form a partnership and jointly manage the project, with the Company acting as project developer. The partnership will actively seek an offtake agreement over the development period for the energy and environmental attributes generated by the facility. The acquisition also includes the intellectual property associated with a 100 MW offsite green hydrogen electrolyser and a 100 MW offsite wind development project. The closing of the transaction remains subject to customary closing conditions, including receipt of shareholder approval by Montem which is expected to occur in March 2023.

TransAlta and Lafarge Canada Advance Low-Carbon Fly Ash Repurposing Project

During the fourth quarter of 2022, the Company entered into an agreement with Lafarge Canada that will advance low-carbon concrete projects in Alberta. The project will repurpose landfilled fly ash, a waste product from the Company’s Canadian coal-fired electricity facilities, which ceased operating on coal at the end of 2021. The ash will be used to replace cement in concrete manufacturing.

Changes to the Board of Directors

On Dec. 15, 2022, the Company announced the appointment of Ms. Manjit Sharma to the board of directors (the “Board” or the “Board of Directors”) effective Jan. 1, 2023. Ms. Sharma brings over 30 years of experience that spans a variety of industries, most recently serving as Chief Financial Officer of WSP Canada Inc.

On Sept. 30, 2022, Ms. Beverlee Park retired from the Board of Directors. Ms. Park served on the Board of Directors since 2015 and as Chair of the Audit, Finance and Risk Committee from April 2018 to May 2022. The Company recognizes the many contributions made by Ms. Park to TransAlta, and thanks her for the many years of service.

Public Offering of Senior Green Bonds and Release of Inaugural Green Bond Framework

On Nov. 17, 2022, the Company issued US$400 million senior notes (“US$400 million Senior Green Bonds”), which have a coupon rate of 7.75 per cent per annum and mature on Nov. 15, 2029. Including the effects of settled interest rate swaps, the notes have an effective yield of approximately 5.98 per cent. The notes are an unsecured obligation, rank equally in right of payment with all of our existing and future senior indebtedness, and are senior in right of payment to all of our future subordinated indebtedness. The interest payments on the bonds are made semi-annually, on November 15 and May 15, with the first payment commencing May 15, 2023.

The Company used the net proceeds from the issuance of the notes to repay $100 million drawn on its credit facility and replaced the balance sheet cash used to fund the repayment in full of the Company’s US$400 million 4.50 per cent unsecured senior notes.

The Company will allocate an amount equal to the net proceeds from this offering to finance or refinance new and/or existing eligible green projects in accordance with its Green Bond Framework (the “Framework”). The Framework received a second-party opinion from Sustainalytics, which verified that it aligned with the Green Bond Principles from the International Capital Market Association.

Announced a 10% Common Share Dividend Increase

On Nov. 7, 2022, the Company announced that the Board of Directors approved a 10 per cent increase in its common share dividend and declared a dividend of $0.055 per common share that was paid on Jan. 1, 2023. The quarterly dividend of $0.055 per common share represents an annualized dividend of $0.22 per common share.

New Term Facility

During the third quarter of 2022, the Company closed a two-year $400 million floating-rate term facility (“Term Facility”) with its banking syndicate with a maturity date of Sept. 7, 2024. As at Dec. 31, 2022, the full amount was drawn on the Term Facility.

Executed Contract Renewals with the IESO at Sarnia and Melancthon 1 Wind Facilities

During the third quarter of 2022, TransAlta Renewables Inc., a subsidiary of the Company, announced that it was awarded capacity contracts for Sarnia and the Melancthon 1 wind facility from the IESO as part of the IESO’s Medium-Term Capacity Procurement Request for Proposals. The new capacity contracts for these two facilities run from May 1, 2026, to Apr. 30, 2031, and the existing contracts will be extended from Dec. 31, 2025 and March 3, 2026, respectively, to Apr. 30, 2026.

Executed Industrial Contract Extensions at Sarnia

During the second and fourth quarters of 2022, the Company executed contracts for the supply of electricity and steam from Sarnia with three of its legacy industrial customers, and with three new customers, who had previously been resold utilities as part of a legacy customer’s contract. Following the contracting efforts in 2021 and 2022, Sarnia has been fully recontracted without interruption to the industrial customers’ delivery terms. The contracts extend to Apr. 30, 2031 for four customers and to Dec. 31, 2032 for the other three customers.

Kent Hills Wind Facilities Update

On June 2, 2022, TransAlta Renewables announced the rehabilitation plan for the Kent Hills 1 and 2 wind facilities together with the execution of amended and extended power purchase agreements (“PPAs”) with NB Power. The amended agreements for the Kent Hills 1, 2 and 3 wind facilities provide for an additional 10-year contract term to December 2045 and an effective 10 per cent reduction to the original contract prices from January 2023 through December 2033. In addition, both parties have agreed to work in good faith to evaluate the installation of a battery energy storage system at Kent Hills and to consider a potential repowering of Kent Hills at the end of its life in 2045. A waiver for the Kent Hills non-recourse bonds was also obtained from the project bondholders and a supplemental indenture was entered into with the bondholders that facilitates the rehabilitation of the Kent Hills 1 and 2 wind facilities.

Mount Keith 132kV Transmission Expansion

On May 3, 2022, TransAlta Renewables exercised its option to acquire an economic interest in the expansion of the Mount Keith 132kV transmission system in Western Australia which will support the Northern Goldfields-based operations of BHP Nickel West (“BHP”). The project is being developed under the existing PPA with BHP, which has a term of 15 years.

Executed Long-term PPA for the Remaining 30 MW at Garden Plain

During the second quarter of 2022, the Company entered into a long-term PPA for the remaining 30 MW of renewable electricity and environmental attributes for the Garden Plain wind project in Alberta with a new investment-grade globally recognized customer. The 130 MW Garden Plain wind project, which was announced in May 2021 with a 100 MW PPA contracted to Pembina Pipeline Corporation (“Pembina”), is now fully contracted with a weighted average contract life of approximately 17 years. Construction is underway with commercial operation expected in the first half of 2023.

Energy Impact Partners Investment

On May 5, 2022, the Company entered into a commitment to invest US$25 million over the next four years in Energy Impact Partners Deep Decarbonization Frontier Fund 1 (the “Frontier Fund”). During 2022, the Company invested $10 million (US$8 million). The investment in the Frontier Fund provides the Company with a portfolio approach to investing in emerging technologies and the opportunity to identify, pilot, commercialize and bring to market emerging technologies that will facilitate the transition to net-zero emissions.

MSCI Environmental, Social and Governance Rating Upgrade

During the second quarter of 2022, TransAlta’s MSCI Environmental Social and Governance Rating was upgraded to ‘A’ from ‘BBB’. The upgrade reflects the Company’s strong renewable energy growth compared to its peers. In 2021, the Company grew its installed renewable energy capacity by 15 per cent through the acquisition and construction of solar and wind facilities and secured 600 MW in additional renewable energy projects. In line with its goal to reduce carbon emissions by 75 per cent from 2015 emissions levels by 2026, TransAlta also completed coal-to-gas conversions of its Canadian coal-fired facilities in 2021, nine years ahead of Alberta’s coal phase-out plan.

Horizon Hill Wind Project and Fully Executed Corporate PPA with Meta

On April 5, 2022, TransAlta announced a long-term renewable energy PPA with a subsidiary of Meta Platforms Inc. (“Meta”), formerly known as Facebook, Inc., for 100 per cent of the generation from its 200 MW Horizon Hill wind project to be located in Logan County, Oklahoma. Under this agreement, Meta will receive both renewable electricity and environmental attributes from the Horizon Hill facility. The facility will consist of a total of 34 Vestas turbines. Construction commenced in the fall of 2022 with a target commercial operation date in the second half of 2023. TransAlta will construct, operate and own the facility.

Alberta Electricity Portfolio

The Alberta Electricity Portfolio generated gross margin of $1,177 million, an increase of $319 million compared to the same period in 2021. Higher merchant margins were realized through dispatch optimization and the increase in realized power prices which more than offset higher fuel costs from increased natural gas prices in 2022 as compared to the prior year. Periods of strong weather-driven demand and unplanned outages resulted in opportunities for each of our fuel types in the Alberta Electricity Portfolio throughout the year.

Alberta’s annual demand for electricity expanded by approximately 1.7% from 2021 to 2022 due to the economic recovery from the COVID-19 pandemic, higher residential cooling demand in summer and stronger market conditions for energy commodities supporting power demand. The average pool price increased from $102 per MWh in 2021 to $162 per MWh in 2022. Pool prices were higher in the second through fourth quarters of 2022, compared to 2021 as a result of higher demand in the province, higher natural gas and carbon prices and stronger prices in an adjacent power market. August and December, specifically, were months with significant weather-driven demand in the province.

For the year ended Dec. 31, 2022, the Alberta Electricity Portfolio achieved a realized merchant power price of $126 per MWh, compared to the Alberta electricity price, which averaged $162 per MWh. The Company was able to benefit during higher-priced periods by optimizing dispatch of each of the Alberta Hydro, and Gas fleet, ensuring high availability during peak demand, while hedged positions at Alberta Gas minimized unfavourable market pricing during lower-priced hours in the quarter.

Hedged volume for the 2022 fiscal year was 7,228 GWh at an average price of $86 per MWh compared to 6,992 GWh at an average price of $72 per MWh in 2021.

Liquidity and Financial Position

The Company continues to maintain a strong financial position in part due to long-term contracts and hedged positions. As at Dec. 31, 2022, TransAlta had access to $2.1 billion in liquidity, including $1.1 billion in cash and cash equivalents.

Fourth Quarter and Year Ended 2022 Highlights

 $ millions, unless otherwise stated

3 Months Ended

Year Ended

Dec. 31, 2022

Dec. 31, 2021

Dec. 31, 2022

Dec. 31, 2021

Adjusted availability (%)

89.5

83.8 

90

86.6 

Production (GWh)

6,005

5,823 

21,258

22,105 

Revenues

854

610

2,976

2,721 

Adjusted EBITDA(1),(2)

541

243

1,634

1,286 

FFO(1),(2)

459

186

1,346

994

FCF(1),(2)

315

79

961

585

Earnings (loss) before income taxes

7

(32)

353

(380)

Net earnings (loss) attributable to common shareholders

(163)

(78)

4

(576)

Cash flow from operating activities

351

54

877

1,001 

Net earnings (loss) per share attributable to common shareholders, basic and diluted

$ (0.61)

$ (0.29)

$ 0.01

$ (2.13)

FFO per share(1),(4)

$ 1.71

$ 0.69 

$ 4.97

$ 3.67 

FCF per share(1),(4)

$ 1.17

$ 0.29

$ 3.55

$ 2.16 

Dividends declared per common share(3)

$ 0.11

$ 0.10 

$ 0.21

$ 0.19 

Dividends declared per preferred share(3)

$ 0.34

$ 0.25

$ 1.20

$ 1.02 
Download the full news release

TransAlta Announces Acquisition of 50% Interest in Early-Stage Pumped Hydro Energy Storage Development Project

Posted on by kevin_wick

TransAlta Announces Acquisition of 50% Interest in Early-Stage Pumped Hydro Energy Storage Development Project

TransAlta Corporation (TransAlta or the Company) (TSX: TA) (NYSE: TAC) announced today that it has entered into a definitive agreement to acquire a 50% interest in the Tent Mountain Renewable Energy Complex (Tent Mountain€ or the €œProject), an early-stage 320 MW pumped hydro energy storage development project, located in southwest Alberta, currently owned by Montem Resources Limited (Montem) (ASX:MR1). TransAlta and Montem will form a partnership and jointly manage the Project, with TransAlta acting as project developer.  The acquisition includes the land rights, fixed assets and intellectual property associated with the pumped hydro development project. The Project leverages Montem’s existing assets at Tent Mountain, which include large legacy water reservoirs from past mining operations.

Pumped hydro is an environmentally sustainable solution for managing the intermittency of increased renewable electricity generation in the Province of Alberta; the characteristics of the Tent Mountain site are rare and present a unique opportunity to provide 15 hours of energy storage capability for the Alberta market. The Project is strategically located on private, industrial zoned land, including an existing upper reservoir that supports a cost competitive pumped hydro project compared to other similar projects. The Project has already completed key technical and environmental work including a hydrology assessment, with additional geotechnical analysis being planned in 2023 to further advance the design of the Project.  The Project will be developed over the next four years, with construction targeted to start as early as 2026 with a commercial operation date between 2028 and 2030, all subject to regulatory, commercial and engineering considerations.  

TransAlta has owned, operated, and constructed hydro facilities for more than 110 years and this Project offers similar long-term advantages as TransAlta’s other Alberta hydro facilities.  These long-term advantages include that the Project will have a life span of greater than 80 years, which will substantially reduce its operating costs compared to other technologies over the life of the Project. The Project’s closed loop system will result in minimal impacts to Alberta’s natural river system and will have the ability to provide flexible, firm clean power to customers at scale. The Project will actively seek an offtake agreement over the development period for the energy and environmental attributes generated by the facility; the Project will provide a unique value proposition to customers seeking carbon free electricity.  

€œThe Tent Mountain Renewable Energy Complex is a unique development opportunity for our Company and the Province of Alberta.  The Project can support the reliability of the Alberta grid with a proven technology that is non-emitting and has a significantly larger capacity and duration than other currently available storage options.  We believe long duration storage projects, like Tent Mountain, are essential to support the reliability of the grid in Alberta as wind and solar penetration increase on the path to net-zero electricity,- said John Kousinioris, President and Chief Executive Officer of TransAlta.

€œWe are thrilled to be entering into this partnership with TransAlta to develop the Tent Mountain Renewable Energy Complex. TransAlta has been operating in the Alberta power market for more than 110 years and brings many skill sets which are complementary to Montem’s,- said Peter Doyle, Managing Director and Chief Executive Officer of Montem.

TransAlta will pay Montem approximately $8 million upon closing the transaction with additional payments of up to $17 million (approximately $25 million total) contingent on the achievement of specific development and commercial milestones.  The acquisition also includes the intellectual property associated with a 100 MW offsite green hydrogen electrolyser and a 100 MW offsite wind development project.  The closing of the transaction remains subject to customary closing conditions, including receipt by Montem of shareholder approval, with closing expected to occur in March 2023. The Project will be independent of TransAlta’s existing Alberta hydro assets and will be managed through this partnership.  TransAlta bears no exposure to reclamation obligations nor to any environmental liabilities arising from Montem’s historical mining operations at the Tent Mountain site.

About Montem Resources

Montem Resources (ASX: MR1) is a steelmaking coal and renewable energy development company that owns and leases coal tenements and freehold land in the Canadian provinces of Alberta and British Columbia. The Company’s objective is to advance its steelmaking coal projects and renewable energy complex in the Crowsnest Pass, Alberta. The Company has planned an integrated mining complex in the Crowsnest Pass, focusing on the low-cost development of open-cut operations that leverage central infrastructure. This is centered around the Tent Mountain Mine Redevelopment Project, and the Chinook Vicary Project.

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 111 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and its climate change strategy with CDP (formerly Climate Disclosure Project) and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has been recognized by CDP with an ‘A-‘ rating. TransAlta has achieved a 61 per cent reduction in GHG emissions since 2015.

For more information about TransAlta, visit our web site at transalta.com.

Cautionary Statement Regarding Forward-Looking Information

This news release contains “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). 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, without limitation, statements pertaining to: the Project, including the ability of the Company to develop, construct and operate the Project; the ability of the Project to leverage Montem’s existing assets at Tent Mountain, including access to infrastructure; the energy storage capabilities, including as it pertains to duration; cost-competitiveness of the Project relative to similar projects;  additional geotechnical analysis to be undertaken in 2023 to further advance the design of the Project; the intention to actively seek an offtake agreement over the development period for the energy and environmental attributes generated by the Project; that the Project will have minimal impacts to Alberta’s natural river system; and TransAlta’s exposure to reclamation obligations and environmental liabilities arising from Montem’s historical mining operations at the Tent Mountain site. These forward-looking statements are not historical facts but are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made, including, but not limited to the price of power in Alberta and the condition of the financial and electricity markets not changing significantly. 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: adverse geotechnical conditions that may not support the construction and operation of the Project; potential inability to secure interconnection and other required infrastructure to support the Project; risks associated with relevant stakeholders, including any opposition from Indigenous and local communities;  inability to secure an offtake contract, which may be required to support the economic construction and operation of the Project; inability to access to any government grants or incentives; inability to secure qualified personnel or staff in regard to the development, construction or operation of the Project; supply chain constraints and limitations; inability to obtain required regulatory approvals; an event of bankruptcy or insolvency of Montem; ; and other risks and uncertainties discussed in the Company’s materials filed with the securities regulatory authorities from time to time and as also set forth in the Company’s MD&A and Annual Information Form for the year ended Dec. 31, 2021. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect TransAlta’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. 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 unless otherwise indicated.

Investor Inquiries:Media Inquiries:
Phone: 1-800-387-3598 in Canada and U.S.Phone: 1-855-255-9184
Email: [email protected]Email: [email protected]
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