TransAlta Corporation Announces Share Repurchase Plan under Normal Course Issuer Bid
Calgary, Alberta, March 26, 2025 – TransAlta Corporation (TransAlta or the Company), a leading independent power producer in Canada, the United States, and Australia, has announced that it has initiated an automatic share purchase plan (ASPP) with its broker to facilitate the repurchase of TransAlta’s common shares (Common Shares) under its previously announced normal course issuer bid (NCIB).
What is a Normal Course Issuer Bid (NCIB)?
An NCIB is a program through which a corporation may purchase its own shares in the open market, subject to certain conditions and limitations set by the regulatory authorities. The purpose of an NCIB is to reduce the outstanding number of shares and thus increase the proportionate ownership interest of the remaining shareholders. It also demonstrates the confidence of the Company’s management in the long-term value of its shares.
TransAlta’s Share Repurchase Plan
TransAlta’s NCIB was initiated on March 17, 2021, and permits the Company to repurchase up to 17,500,000 Common Shares, which represents approximately 10% of its issued and outstanding Common Shares as of February 25, 2021. The maximum daily repurchase amount under the NCIB is 123,618 Common Shares, which is equal to 25% of the average daily trading volume of TransAlta’s Common Shares on the Toronto Stock Exchange and the New York Stock Exchange for the six calendar months preceding the date of the Company’s notice to the Toronto Stock Exchange.
Impact on TransAlta Shareholders
TransAlta’s decision to repurchase shares under its NCIB may have several potential impacts on current shareholders:
- Increased Earnings Per Share: By reducing the number of outstanding shares, each remaining shareholder will own a larger proportionate share of the Company’s earnings.
- Enhanced Shareholder Value: Share buybacks can lead to a higher earnings per share (EPS) ratio, which can result in a higher stock price.
- Reduced Dilution: The repurchase of shares reduces the potential dilution that could result from future issuances of new shares.
Impact on the Global Economy
The global economy may also experience certain effects as a result of TransAlta’s share repurchase plan:
- Reduced Supply: The repurchase of shares reduces the overall supply of TransAlta Common Shares on the market, which could potentially lead to increased demand and a higher price for the shares.
- Impact on Market Liquidity: The reduction in the number of shares available for trading could potentially impact market liquidity, making it more difficult for investors to buy and sell TransAlta shares.
Conclusion
TransAlta Corporation’s decision to repurchase shares under its normal course issuer bid is a strategic move that could potentially benefit both the Company and its shareholders. By reducing the number of outstanding shares, TransAlta can increase the value of each remaining share, reduce dilution, and demonstrate confidence in the long-term value of its shares. However, it is essential to note that the repurchase of shares can also impact market liquidity and potentially lead to increased demand and a higher price for the shares. Ultimately, TransAlta’s share repurchase plan is an example of a company taking proactive steps to enhance shareholder value and position itself for future growth.
As a responsible and engaged investor, it is essential to stay informed about the companies in which you have invested. By understanding the reasons behind TransAlta’s share repurchase plan and its potential implications, you can make informed decisions about your investment strategy and maintain a well-diversified portfolio.
