TransAlta Renewables to invest $540m in three Canadian assets

TransAlta Renewables has agreed to invest around $540m into three of its Canadian assets including Sarnia cogeneration plant, Le Nordais wind farm and Ragged Chute hydro facility.

The combined portfolio of these three facilities, which are located in Canada’s Ontario and Quebec region, is capable of generating around 611MW of power.

The three farms belong to TransAlta Renewables’ majority group TransAlta and the investment will include acquisition of securities that track the profits of the three properties.

In order to finance the cash part of the investment, TransAlta has entered into a $150m deal with a group of underwriters co-led by CIBC World Markets and TD Securities.

The deal will see TransAlta secure $175m in common shares of TransAlta Renewables and $215m in convertible unsecured subordinated debentures.

The company will also sell $200m of TransAlta Renewables common shares to Alberta Investment Management.

TransAlta Renewables president and CEO Dawn Farrell said: "TransAlta Renewables will continue to be a key part of our strategy to strengthen our balance sheet, improve our liquidity, and position TransAlta and TransAlta Renewables for future growth opportunities.

"With the proceeds from the transactions announced today, together with the Australian transaction that was completed in May of this year, we will achieve our debt reduction target for the year by generating cash proceeds of approximately $575m."

In March, TransAlta Renewables has made an investment of around $1.78bn in TransAlta’s power generation and gas pipeline portfolio in Australia as well as funded the remaining project costs for South Hedland gas-fired project.

The Australian portfolio has six operating assets, which can generate 575MW of power, and an under construction South Hedland project.

It also includes a 270 km gas pipeline that has been commissioned recently.