Electrical Commissioning In Industrial Power Systems
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TransAlta announced recently it intends to sell its 50 per cent interest in the two-unit, 756-megawatt coal-fired Sheerness station to TransAlta Cogeneration, a limited partnership 50.01 per cent by TransAlta and 49.99 per cent by TransAlta Power, another affiliated company.
TransAlta Power was set up to own three cogeneration plants in Ontario and 60 per cent of a plant in Fort Saskatchewan, Alta.
Cogeneration plants are typically gas-fired operations that produce electricity and steam, a byproduct which is then resold to nearby industrial users.
After the Sheerness sale, Canadian Utilities Ltd. will continue to own the other 50 per cent of the plant and operate the facility, about 200 kilometres northeast of Calgary.
TransAlta said it expects to get $315 million from the sale, resulting in an after-tax gain of about $55 million. The Calgary company said it will use the money to pay down debt.
"The sale of Sheerness is another step in our continued drive to maintain a strong balance sheet and provide the company with more financial flexibility," Steve Snyder, TransAlta's president and chief executive, said in a release.
In a related move, TransAlta Power said it has filed a plan with regulators to offer partnership units and purchase warrants to raise about $150 million to help finance the acquisition.
"We expect the addition of the Sheerness facility to TransAlta Power L.P. to increase cash distributions to unitholders by approximately 4.6 per cent," said Ian Bourne, president and director. "In addition, we will now have a more diversified fuel and geographic base, as well as improved liquidity and access to capital as a result of the larger market capitalization."
TransAlta Corp. is a major power producer with operations in Canada, the United States and Mexico.
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