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TransAlta Corp cuts dividend by more than a third to save money for shift away from coal

TransAlta has cut its quarterly dividend by more than a third to save money as it transitions toward gas and renewable power generation and away from coal.

TransAlta Corp, the Alberta power generator, cut its quarterly dividend by more than a third to save money as it transitions toward gas and renewable power generation and away from coal.

The quarterly dividend was cut to 4 cents a share from 18 cents previously, the company said in a release Thursday. Calgary-based TransAlta doesn’t expect to raise equity this year as the reduced dividend will “strengthen its balance sheet.” The utility plans to raise debt to fund US$400 million of obligations maturing in 2017.

“The actions we are taking today are prudent and proactive steps that will maximize our long-term financial flexibility,” Dawn Farrell, chief executive officer, said in the release. “We are taking action now to ensure we can manage our transition from a position of strength.”

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