TransAlta Renewables has agreed to invest close to C$540m ($404m) in its parent company TransAlta Corporation's (TransAlta) wind and hydro power assets.
Located in Ontario and Quebec, the power generation assets include Sarnia cogeneration plant, Le Nordais wind farm and Ragged Chute hydro facility with a total capacity of around 611MW.
The investment includes the acquisition of securities that will track the profits of the three clean energy generating projects.
Additionally, TransAlta Renewables has inked an agreement to sell C$200m ($149.5m) of its common shares to Alberta Investment Management Corporation (AIMCo).
The company has also entered into a C$150m ($112m) bought deal agreement with a group of underwriters co-led by CIBC World Markets and TD Securities in order to partially finance the transaction.
Subject to customary regulatory approvals and the approval from TransAlta Renewables’ shareholders, the deal is expected to be completed in January 2016.
Upon closing of the transaction, TransAlta will receive close to C$150m ($112m) in cash proceeds, C$175m ($130.8m) in common shares of TransAlta Renewables and C$215m ($160.7m) of convertible unsecured subordinated debentures.
TransAlta owns 65% in TransAlta Renewables and it will continue to manage and operate the portfolio.
TransAlta president and CEO Dawn Farrell said: "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 $575 million.
"In addition, we are pleased to have AIMCo, a high performance investment manager with global experience, join us as a significant investor in TransAlta Renewables."
In July this year, TransAlta bought 71MW of long-term contracted renewable generation assets from an affiliate of Rockland Capital.
TransAlta operates over 70 power plants in Canada, the US and Australia which includes geothermal, wind, hydro, natural gas and coal power generation facilities.
Image: TransAlta Renewables will invest C$540m ($404m) in TransAlta Corporation’s wind and hydro power assets. Photo: courtesy of pakorn / FreeDigitalPhotos.net.