TransAlta Announces Close of Solomon Power Station Acquisition
September 28 2012 - 6:51AM
Marketwired
TransAlta Corporation (TransAlta) (TSX:TA) (NYSE:TAC) announced
today that through its subsidiaries, it has successfully completed
the acquisition of the Solomon power station for U.S. $318
million.
"TransAlta has been a valued behind-the-fence generator in
Western Australia for the past 15 years and this acquisition fits
well with our strategy of expanding in that region," said Dawn
Farrell, TransAlta President and CEO. "The Solomon power station is
fully contracted and will provide immediate value to our
shareholders, adding to both earnings and free cash flow per
share."
The Solomon power station is fully contracted with Fortescue
Metals Group Ltd. (Fortescue) under a long-term Power Purchase
Agreement (PPA) and will support their iron ore mining operations
in the Solomon Hub, located in the Pilbara region of Western
Australia. The initial term of the PPA is 16 years after which
Fortescue has the option to either extend the PPA by an additional
five years under the same terms, or to acquire the facility from
TransAlta for a value equivalent to the five year extension.
The acquisition is expected to generate unlevered after-tax
returns in the low double digits and pre-financing cash flows of
approximately $40 million per year.
About TransAlta Corporation
TransAlta is a power generation and wholesale marketing company
focused on creating long-term shareholder value. TransAlta
maintains a low-to-moderate risk profile by operating a highly
contracted portfolio of assets in Canada, the United States and
Australia. TransAlta's focus is to efficiently operate our
geothermal, wind, hydro, natural gas and coal facilities in order
to provide our customers with a reliable, low-cost source of power.
For 100 years, TransAlta has been a responsible operator and a
proud contributor to the communities where we work and live.
TransAlta is recognized for its leadership on sustainability by the
Dow Jones Sustainability North America Index, the FTSE4Good Index
and the Jantzi Social Index. TransAlta is Canada's largest
investor-owned renewable energy provider.
This news release may contain forward looking statements,
including statements regarding the business and anticipated
financial performance of TransAlta Corporation. These statements
are based on TransAlta Corporation's belief and assumptions based
on information available at the time the assumption was 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, pricing in the market
place, our inability to enter into long term contracts due to
prevailing market conditions, legislative or regulatory
developments, competition, global capital markets activity, changes
in interest rates, currency exchange rates, inflation levels and
general economic conditions in geographic areas where TransAlta
Corporation operates.
Note: All financial figures are in Canadian dollars unless noted
otherwise.
Contacts: TransAlta Corporation - Investor Inquiries: Jess
Nieukerk Director, Investor Relations 1
800-387-3598investor_relations@transalta.com TransAlta Corporation
- Media Inquiries: TransAlta Media Relations 1 403-267-3999
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