Brookfield to invest $559mn in TransAlta

Bloomberg

Brookfield Asset Management Inc. will invest C$750 million ($559 million) in power producer TransAlta Corp. and nominate two directors to its board.
Brookfield could also increase its stake in the Calgary-based utility to about 9 percent under certain conditions, according to a statement. The deal allows Brookfield to convert its investment into an equity interest in TransAlta’s Alberta hydro assets at a later date.
The investment is being made through Brookfield’s publicly traded renewable-energy arm, Brookfield Renewable Partners. Shares of TransAlta rose 3.9 percent in Toronto trading, closing at highest level since July 2015 and giving the company a market value of about C$2.7 billion.
The two parties have held conversations over the years about various transactions but ultimately decided to proceed with the deal because it allows TransAlta to crystalise the future value of hydro assets and speed up its transition to clean energy, said Dawn Farrell, TransAlta chief executive officer, in an interview.
“Brookfield is a big and sophisticated company that has huge ownership in renewables and hydro,” Farrell said. “No amount of pressure would make this kind of transaction come together. It requires people who understand the industry, understand infrastructure, and understand each other.”