16 October 2007 – Hong Kong-based Cheung Kong Infrastructure Holdings will buy TransAlta Power, which has a 404 MW stake in six Canadian power plants, for C$629m (US$644m), TransAlta has announced.
TransAlta Power owns a 49.99% interest in TransAlta Cogeneration that has net interests of 815 MW in five natural gas-fired cogeneration plants in Alberta, Ontario and Saskatchewan and a coal-fired plant in Alberta. The plants have a total capacity of 1,362 MW and power is sold to various parties under long-term contracts.
In May, TransAlta Power said its board was considering a sale because of federal tax law changes proposed in October 2006 that would revise TransAlta Power’s tax structure. At that time, TransAlta Power said unitholders receive credits that reduce their income tax, but the credits would no longer be available in 2011, when the law goes into effect.
Two thirds of TransAlta Power’s unitholders must give approval for the deal to go through. Some regulatory approvals also are needed.