TransAlta slashes dividend to support shift to clean power from coal
Company cuts quarterly dividend to 4 cents , suspends DRIP program
CALGARY—TransAlta Corp. is slashing its quarterly dividend to 4 cents as it works to support its shift away from coal-fired generation toward renewable energy and gas.
Previously paying 18 cents quarterly, the company said the new figure represents a 15 to 20 per cent payout of comparable free cash flow based on its guidance.
“The actions we are taking today are prudent and proactive steps that will maximize our long-term financial flexibility,” Dawn Farrell, the company’s president and CEO, said. “We are taking action now to ensure we can manage our transition from a position of strength.”
Along with cutting the dividend, the company has suspended its dividend reinvestment, or DRIP program, to stop shareholder dilution.
TransAlta also said it is looking to negotiate a Coal Transition Agreement with the Alberta government as it looks to replace its coal generating assets with gas-fired plants or renewables.
“An important aspect of these negotiations will be the Government of Alberta’s commitment to treat coal-fired generators fairly and not unnecessarily strand capital,” the company said.