TransAlta Renews Normal Course Issuer Bid

Rhea-AI Summary

TransAlta Corporation (NYSE: TAC) has announced a new Normal Course Issuer Bid (NCIB) program to repurchase up to 14 million common shares, representing approximately 4.7% of outstanding shares. The program will run from May 31, 2025, to May 30, 2026. Under TSX rules, daily purchases are limited to 481,658 shares, except for block purchases. Under its previous NCIB, TransAlta repurchased 7,963,000 shares at an average price of $12.00 per share. The company views this NCIB as a strategic capital allocation tool to enhance shareholder value when share prices don't reflect underlying value. TransAlta is a major Canadian power generation company, notably being Canada's largest wind power producer and Alberta's largest hydro-electric power producer.

Positive

• Authorization to repurchase up to 14 million shares (4.7% of outstanding shares)
• Successful completion of previous NCIB with 7.96 million shares repurchased
• Strong environmental performance with 70% reduction in GHG emissions since 2015
• Upgraded MSCI ESG rating to AA

Negative

• Share repurchases are subject to market conditions and company discretion
• Daily purchase limitations of 481,658 shares under TSX rules may impact buyback execution

Insights

Financial Analyst

TransAlta's new share buyback program allows repurchase of 4.7% of outstanding shares, potentially enhancing shareholder value through capital return.

TransAlta has announced a renewal of its Normal Course Issuer Bid (NCIB) program, authorizing the repurchase of up to 14 million common shares, representing approximately 4.7% of its outstanding shares. This program will run from May 31, 2025, to May 30, 2026, with daily purchase limits of 481,658 shares (except for block purchases).

The company has already demonstrated commitment to this capital allocation strategy, having repurchased 7.96 million shares at an average price of $12.00 per share under its previous NCIB program. This represents a total capital return of approximately $95.6 million to shareholders.

Share repurchase programs like this typically signal management's confidence in the company's intrinsic value and future prospects. By reducing the number of outstanding shares, TransAlta can potentially increase earnings per share and return on equity metrics, even without operational growth. The company's board specifically notes they believe the market price sometimes doesn't reflect the underlying value of shares.

For investors, this NCIB provides a cushion of predictable demand in the market and represents a tax-efficient way to return capital compared to dividends. The program's flexibility allows TransAlta to be opportunistic, increasing purchases when shares appear undervalued and preserving capital when better investment opportunities arise.

This capital allocation decision should be viewed in context with TransAlta's position as a major renewable energy producer in Canada, with significant wind and hydro assets. The company has achieved substantial greenhouse gas reductions of 70% since 2015, positioning it favorably in the energy transition landscape.

CALGARY, Alberta, May 27, 2025 (GLOBE NEWSWIRE) -- TransAlta Corporation (“TransAlta” or the “Company”) (TSX: TA) (NYSE: TAC) announced today that the Toronto Stock Exchange (“TSX”) has accepted the notice filed by the Company to implement a normal course issuer bid (“NCIB”) for a portion of its common shares (“Common Shares”).

Pursuant to the NCIB, TransAlta may repurchase up to a maximum of 14,000,000 Common Shares, representing approximately 4.7% of the 296,449,829 Common Shares issued and outstanding as at May 20, 2025. Purchases under the NCIB may be made through open market transactions on the TSX and any alternative Canadian trading systems on which the Common Shares are traded, based on the prevailing market price. Any Common Shares purchased under the NCIB will be cancelled.

Transactions under the NCIB will depend on future market conditions. TransAlta will initially retain discretion whether to make purchases under the NCIB, and to determine the timing, amount and acceptable price of any such purchases, subject at all times to applicable TSX and other regulatory requirements. The period during which TransAlta is authorized to make purchases under the NCIB commences on May 31, 2025, and ends on May 30, 2026, or such earlier date on which the maximum number of Common Shares are purchased under the NCIB or the NCIB is terminated at the Company’s election.

Under TSX rules, not more than 481,658 Common Shares (being 25% of the average daily trading volume on the TSX of 1,926,633 Common Shares for the six months ended April 30, 2025) can be purchased on the TSX on any single trading day under the NCIB, with the exception that one block purchase in excess of the daily maximum is permitted per calendar week.

TransAlta has repurchased and cancelled 7,963,000 Common Shares on the open market through the facilities of the TSX and/or alternative Canadian trading systems at an average price of $12.00 per share under its prior NCIB approved by the TSX on May 27, 2024, for the twelve-month period commencing May 31, 2024.

The NCIB provides the Company with a capital allocation alternative with a view to providing long-term shareholder value. TransAlta’s Board of Directors and Management believe that, from time to time, the market price of the Common Shares does not reflect their underlying value and purchases of Common Shares for cancellation under the NCIB may provide an opportunity to enhance shareholder value.

About TransAlta Corporation:
TransAlta owns, operates and develops a diverse fleet of electrical power generation assets in Canada, the United States and Australia with a focus on long-term shareholder value. TransAlta provides municipalities, medium and large industries, businesses and utility customers with clean, affordable, energy efficient and reliable power. Today, TransAlta is one of Canada’s largest producers of wind power and Alberta’s largest producer of hydro-electric power. For over 114 years, TransAlta has been a responsible operator and a proud member of the communities where we operate and where our employees work and live. TransAlta aligns its corporate goals with the UN Sustainable Development Goals and the Future-Fit Business Benchmark, which also defines sustainable goals for businesses. Our reporting on climate change management has been guided by the International Financial Reporting Standards (IFRS) S2 Climate-related Disclosures Standard and the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. TransAlta has achieved a 70 per cent reduction in GHG emissions or 22.7 million tonnes CO2e since 2015 and received an upgraded MSCI ESG rating of AA.

For more information about TransAlta, visit its website at transalta.com.

Cautionary Statement Regarding Forward-looking Information:
This news release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. The use of any of the words “may”, “will”, and similar expressions are intended to identify forward-looking information or statements. More particularly, and without limitation, this news release contains forward-looking statements and information relating to TransAlta’s intentions with respect to the NCIB, the effects of repurchases of Common Shares and purchases thereunder, including any enhancement to shareholder value. These statements are based on TransAlta’s belief and assumptions based on information available at the time the assumptions were made. These statements are subject to a number of risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. Some of the factors that could cause such differences include: the entering into of an automatic securities purchase plan; legislative or regulatory developments; any significant changes to Common Share price or trading volume; continued availability of capital and financing; changes to general economic, market or business conditions; business opportunities that become available to, or are pursued by TransAlta; and other risk factors contained in the Company’s annual information form and management’s discussion and analysis. Readers are cautioned not to place undue reliance on these forward-looking statements or forward-looking information, which reflect TransAlta’s expectations only as of the date of this news release. TransAlta disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. 

Note: All financial figures are in Canadian dollars unless otherwise indicated.

For more information:

Investor Inquiries: Phone: 1-800-387-3598 in Canada and U.S. Email: investor_relations@transalta.com

Media Inquiries: Toll-free media number: 1-855-255-9184 Email: ta_media_relations@transalta.com

FAQ

How many shares can TransAlta (TAC) repurchase under its new 2025 NCIB program?

TransAlta can repurchase up to 14 million common shares, representing approximately 4.7% of its outstanding shares as of May 20, 2025.

What was TransAlta's performance in its previous NCIB program?

Under its prior NCIB, TransAlta repurchased and cancelled 7,963,000 common shares at an average price of $12.00 per share.

When does TransAlta's new NCIB program start and end?

The NCIB program runs from May 31, 2025, to May 30, 2026, unless the maximum share amount is reached earlier or the program is terminated by the company.

What are the daily purchase limitations for TransAlta's 2025 NCIB?

Under TSX rules, TransAlta can purchase up to 481,658 shares per trading day, with the exception of one block purchase allowed per calendar week.

What is TransAlta's environmental performance record?

TransAlta has achieved a 70% reduction in GHG emissions (22.7 million tonnes CO2e) since 2015 and received an upgraded MSCI ESG rating of AA.