{"id":33590,"date":"2012-09-05T09:20:00","date_gmt":"2012-09-05T09:20:00","guid":{"rendered":"https:\/\/www2.thestockmarketwatch.com\/stock-market-news\/transalta-tac-annouces-acquisition-of-solomon-power-station\/33590\/"},"modified":"2012-09-05T09:20:00","modified_gmt":"2012-09-05T09:20:00","slug":"transalta-tac-annouces-acquisition-of-solomon-power-station","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/transalta-tac-annouces-acquisition-of-solomon-power-station\/33590\/","title":{"rendered":"TransAlta &#8211; TAC  &#8211; Annouces acquisition of Solomon Power Station"},"content":{"rendered":"<p><script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"ca-pub-1408583772585547\";\n\/* SMW - News Links *\/\ngoogle_ad_slot = \"3490797620\";\ngoogle_ad_width = 468;\ngoogle_ad_height = 15;\n\/\/-->\n<\/script><br \/>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script><\/p>\n<p><strong><a href=\"https:\/\/thestockmarketwatch.com\/stock.aspx?stock=TAC\">NYSE: TAC<\/a>)<\/strong> announced that its wholly owned subsidiary has entered into an agreement with Fortescue Metals Group Ltd. (Fortescue) to acquire its 125 megawatt (MW) dual-fuel Solomon power station for U.S. $318 million.<\/p>\n<p>In connection with the acquisition, TransAlta (TAC) also announced that it has entered into an agreement with a syndicate of underwriters, led by CIBC and RBC Capital Markets as bookrunners, under which the underwriters have agreed to purchase from TransAlta and sell to the public 19,250,000 Common Shares. The purchase price of Cdn $14.30 per Common Share will result in gross proceeds to TransAlta of approximately Cdn $275 million.<\/p>\n<p>\u201cThis acquisition represents a significant expansion of our energy business in Western Australia and provides TransAlta with a new valued customer,\u201d said Dawn Farrell, TransAlta President and CEO. \u201cIt fits with our strategy of being a leading behind-the-fence generator in that region and provides us with a broader platform for future growth.\u201d<\/p>\n<p>The Solomon power station will be fully contracted with 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 will have 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.<\/p>\n<p>The power station is currently under construction and is expected to be commissioned in Q4 2012. 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. Under International Financial Reporting Standards, TransAlta will account for the facility as a <a href=\"http:\/\/www.knowfinance.com\/category\/finance\/\" target=\"_blank\" rel=\"noopener\">finance<\/a> lease.<\/p>\n<p>The acquisition is expected to close by the end of September, 2012 and is subject to customary regulatory approvals.<\/p>\n<p><strong>TAC &#8211; Investment Highlights of Solomon Acquisition:<\/strong><\/p>\n<ul>\n<li>Fits directly with TransAlta\u2019s strategy to be a leading behind-the-fence generator in Western Australia<\/li>\n<li>Increases TransAlta\u2019s net generation capacity in Western Australia by over 40 per cent to 425 MW, significantly advancing our growth target of owning and operating 600 MW in Western Australia<\/li>\n<li>Long-term PPA that is fully guaranteed by Fortescue provides stable and growing cash flows through capacity payments that escalate annually<\/li>\n<li>Flow through of operating, fuel, maintenance and capital costs<\/li>\n<li>Proven technology and operating model<\/li>\n<li>Accretive to both earnings and free cash flow per share<\/li>\n<\/ul>\n<p><strong>About TransAlta Corporation &#8211; TAC<\/strong><\/p>\n<p>TransAlta (TAC) \u00a0is a power generation and wholesale marketing company focused on creating long-term shareholder value. TAC maintains a low-to-moderate risk profile by operating a highly contracted portfolio of assets in Canada, the United States and Australia. TransAlta&#8217;s focus is to efficiently operate our wind, hydro, geothermal, natural gas and coal facilities in order to provide our customers with a reliable, low-cost source of power.<em> <\/em><\/p>\n<div class=\"nr_clear\"><\/div>\n<div id=\"nrelate_popular_2\" class=\"nrelate nrelate_popular nrelate_default nr_1col nr_text\"><\/div>\n<p>\t<!--[if IE 6]>\n\t\t<script type=\"text\/javascript\">jQuery('.nrelate_default').removeClass('nrelate_default');<\/script>\n\t<![endif]--><\/p>\n<p>\t<script type=\"text\/javascript\">\n\t\/* <![CDATA[ *\/\n\t\tnRelate.domain = \"www2.thestockmarketwatch.com%2Fstock-market-news\";\n\t\tvar entity_decoded_nr_mp_url = jQuery('<span\/>').html(\"https:\/\/web.archive.org\/web\/20120908085218\/http:\/\/api.nrelate.com\/mpw_wp\/0.51.2\/?tag=nrelate_popular&domain=www2.thestockmarketwatch.com%2Fstock-market-news&url=http%3A%2F%2Fwww2.thestockmarketwatch.com%2Fstock-market-news%2Ftransalta-tac-annouces-acquisition-of-solomon-power-station%2F33590&nr_div_number=2&maxageposts=7200&increment=1\").text();\n\t\tnRelate.getNrelatePosts(entity_decoded_nr_mp_url);\n\t\/* ]]&gt; *\/\n\t<\/script>\n\n\n<div class=\"nr_clear\"><\/div>\n\n\n\n\n<!-- AddThis Button BEGIN -->\n\n\n<div class=\"addthis_toolbox addthis_default_style addthis_32x32_style\">\n<a class=\"addthis_button_preferred_1\"><\/a>\n<a class=\"addthis_button_preferred_2\"><\/a>\n<a class=\"addthis_button_preferred_3\"><\/a>\n<a class=\"addthis_button_preferred_4\"><\/a>\n<a class=\"addthis_button_compact\"><\/a>\n<a class=\"addthis_counter addthis_bubble_style\"><\/a>\n<\/div>\n\n\n<script type=\"text\/javascript\">var addthis_config = {\"data_track_addressbar\":true};<\/script>\n<script type=\"text\/javascript\" src=\"http:\/\/s7.addthis.com\/js\/250\/addthis_widget.js#pubid=pennystocksfinder\"><\/script>\n<!-- AddThis Button END -->\n\n\n\n\n<p>More Posts by this author<\/p>\n\n\n\n<ul>\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/gold-prices-surge-on-easing-hopes\/33815\">\nGold Prices Surge on Easing Hopes<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/stocks-end-marginally-higher-4\/33790\">\nStocks End Marginally Higher<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/gold-prices-rally-on-qe-hopes-silver-prices-also-surge\/33788\">\nGold Prices Rally on QE Hopes; Silver Prices also Surge<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/stocks-headed-for-a-mixed-finish-17\/33787\">\nStocks Headed for a Mixed Finish<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/stocks-struggle-for-direction-as-jobs-data-disappoints\/33783\">\nStocks Struggle for Direction as Jobs Data Disappoints<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/ag-mortgage-investment-trust-mitt-stock-dividend-of-0-77-per-share\/33771\">\nAG Mortgage Investment Trust &#8211; MITT &#8211; Stock Dividend of $0.77 per Share<\/a><\/li>\n\n\n\n\n\n\n<li><a href=\"http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/trinity-industries-trn-reaches-agreement-to-acquire-certain-assets-of-dmi-industries\/33770\">\nTrinity Industries &#8211; TRN &#8211; Reaches Agreement to Acquire Certain Assets of DMI Industries<\/a><\/li>\n\n\n\n<\/ul>\n\n\n\n\n\n\n<hr>\n\n\n\n\n\n<table style=\"border:none;margin:0;\">\n\n\n<tr>\n\n\n<td style=\"padding:5px;vertical-align:top;\" valign=\"top\">\n<img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/web.archive.org\/web\/20120908085218im_\/http:\/\/www2.thestockmarketwatch.com\/stock-market-news\/wp-content\/uploads\/userphoto\/5.jpg\" alt=\"edliston\" width=\"125\" height=\"125\" class=\"photo\"><\/td>\n\n\n\n\n<td style=\"padding:5px;vertical-align:top;\" valign=\"top\">\n\n\n<div style=\"font-size:11pt;\"><b>Post Written By: Ed Liston <\/b><\/div>\n\n\n\n\n<div style=\"font-size:10pt;\">\n\nEd Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.\n<\/div>\n\n\n<\/td>\n\n<\/tr>\n\n<\/table>\n\n\n\n\n\n\n<script type=\"text\/javascript\"><!--\ngoogle_ad_client = \"pub-1408583772585547\";\n\/* 336x280, created 7\/9\/11 *\/\ngoogle_ad_slot = \"3552319058\";\ngoogle_ad_width = 336;\ngoogle_ad_height = 280;\n\/\/-->\n<\/script>\n<script type=\"text\/javascript\" src=\"http:\/\/pagead2.googlesyndication.com\/pagead\/show_ads.js\">\n<\/script>\n\n\t\t\t\t\t\t\n\n\t\n\n<div style=\"margin:5px;margin-bottom:20px;font-size:11pt;\">&laquo; <a href=\"https:\/\/thestockmarketwatch.com\/stock-market-news\/\">Return to Stock Market News<\/a> &laquo; <\/div>\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"<p>NYSE: TAC) announced that its wholly owned subsidiary has entered into an agreement with Fortescue Metals Group Ltd. (Fortescue) to [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50312,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"rank_math_schema_Article":[],"rank_math_focus_keyword":[],"rank_math_description":[],"financial_data_references":[],"stock_symbols_mentioned":[],"footnotes":""},"categories":[3],"tags":[2344],"class_list":["post-33590","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-news","tag-tac"],"_links":{"self":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/33590","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/comments?post=33590"}],"version-history":[{"count":0,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/posts\/33590\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media\/50312"}],"wp:attachment":[{"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/media?parent=33590"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/categories?post=33590"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/wp-json\/wp\/v2\/tags?post=33590"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}