Calgary: TransAlta Renewables Inc. and TransAlta Corporation announced November 23 that they have entered into an investment agreement pursuant to which TransAlta Renewables has agreed to invest in TransAlta’s Sarnia Cogeneration Plant, Le Nordais wind farm and Ragged Chute hydro facility for a combined value of approximately $540 million.
The portfolio consists of approximately 611 MW of highly contracted power generation assets located in Ontario and Quebec. TransAlta Renewables’ investment will consist of the acquisition of securities which will track the net distributable profits of the Portfolio. As part of the transaction, TransAlta Renewables will issue $175 million in common shares to TransAlta and $215 million in convertible unsecured subordinated debentures.
The Company also announced that, in order to finance the cash portion of the investment, it has entered into a $150 million bought deal offering co-led by CIBC Capital Markets and TD Securities Inc., as joint bookrunners. The offering was expected to close on or about December 2, 2015, while the transaction will close in January 2016.