Advertisement
Canada

TransAlta vows to defend against ‘frivolous’ lawsuit as meeting date looms

The company said it is reviewing the ruling, including the possibility of seeking leave to appeal with the Alberta Court of Appeal.
The company said it is reviewing the ruling, including the possibility of seeking leave to appeal with the Alberta Court of Appeal. Credit/Canadian Press

The chairman of TransAlta Corp. says a lawsuit launched by an American activist investor on Tuesday is a “frivolous tactic” and the power utility intends to defend itself vigorously.

Gordon Giffin says the move by New York-based Mangrove Partners to prevent the Calgary-based company from concluding a $750-million partnership deal with Brookfield Renewable Partners won’t succeed.

Mangrove is trying to derail the deal because it says it was rushed, failed to properly consider other options and puts the interests of the board ahead of the interests of the shareholders.

READ MORE: American activist investors seek regulatory order delaying TransAlta annual meeting

Last week, the investor withdrew an application to the Alberta Securities Commission for a hearing to demand a delay in the meeting at which the company plans to ask shareholders to elect Brookfield nominees to its board of directors, a condition of closing the agreement. It also wanted TransAlta to be forced to hold a vote on the deal.

Story continues below advertisement

Giffin says the majority of TransAlta’s shareholders have already voted “overwhelmingly” in favour of its nominated board.

READ MORE: CEO defends TransAlta investment deal with Brookfield after U.S. investors seek option to cancel

TransAlta CEO Dawn Farrell has defended the Brookfield deal as very good for shareholders previously and insisted the company thoroughly investigated other options before signing.

Mangrove and an entity controlled by Bluescape Energy Partners had agreed to join forces to use their combined 10.1 per cent ownership of TransAlta to force the examination of other financial options but they said in a regulatory filing last Friday that they had ended their partnership. Mangrove says it owns 7.1 per cent of TransAlta.

TransAlta has said it plans to spend $350 million of the Brookfield investment to speed its coal-to-gas power generation transition strategy in Alberta and will use up to $250 million to buy back shares over three years.

Watch below (Jan. 2, 2018): The turn of the calendar to 2018 saw TransAlta retire one of its coal power generating units at its Sundance plant west of Edmonton and mothball another as it begins the transition to cleaner sources of energy. Tom Vernon reports.

Coal power starts going offline in Alberta as shift to cleaner energy picks up
Coal power starts going offline in Alberta as shift to cleaner energy picks up
Global News Redesign Global News Redesign
A fresh new look for Global News is here, tell us what you think
Take a Survey

Sponsored Stories