TransAlta Renewables Shares Slide on Repair Work at in New Brunswick Wind Farms

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by Adriano Marches

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TransAlta Renewables Inc. U.S. shares fell in early trading Tuesday when the company said all of its turbines at the Kent Hill sites in New Brunswick would require foundation replacement.

At 10:23 a.m. ET, shares were down 9.6% at C$16.28.

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The Canadian owner of renewable and natural gas power generation facilities said 50 turbines at its Kent Hills 1 and 2 wind sites are in need of complete foundation replacement.

The turbines will not operate until their associated foundation is repaired, foregoing revenue of C3.4 million (US$2.7 million) per month. The company estimates the replacement cost to be C$75 million to $100 million.

“The root cause failure analysis indicates that deficiencies in the foundation’s original design have led to the spread of cracks within the foundation and the foundation must be replaced,” the company said.

TransAlta has warned that it could default on certain terms of its C$222 million project bond. In any case of default, holders of more than 50% of the outstanding principal of the bond have the right to demand full repayment of principal and interest. The company said it is in talks with bondholders.

TransAlta said it expects the wind facility foundation to be completely replaced by the end of 2023 and is evaluating its options for recovering costs from third parties and insurance.

Write to Adriano Marchese at [email protected]

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