Hut 8 sells 310MW power portfolio to TransAlta

Hut 8 Corp. (NASDAQ: HUT) has entered into a definitive share purchase agreement to sell its 310-megawatt portfolio of four natural gas-fired power plants in Ontario to TransAlta Corporation (NYSE: TAC), according to a company statement.

The portfolio consists of four natural gas-fired power plants owned and operated by Far North Power Corp., an entity formed by Hut 8 and Macquarie Equipment Finance Ltd., a subsidiary of Macquarie Group Limited. The transaction concludes a multi-phase program through which Hut 8 stabilized and strengthened the portfolio following its acquisition out of bankruptcy.

Earlier this year, Far North secured five-year capacity contracts across the 310-megawatt portfolio through the Ontario IESO Medium-Term 2 auction. These contracts transition the power generation assets from short-term, seasonal arrangements to long-term, investment-grade-backed revenue commitments.

"Our power-native team executed a disciplined program to strengthen the four natural-gas power plants comprising the Portfolio, enhancing their operational and commercial footing," said Asher Genoot, CEO of Hut 8. "This work enabled the award of investment-grade, long-term capacity contracts across all four sites through the MT2 process."

Sean Glennan, CFO of Hut 8, stated that the facilities are not core to the company's current strategy, which focuses on digital infrastructure development opportunities. "Redeploying capital from the Portfolio enables us to advance those opportunities while demonstrating our ability to invest in, optimize, and ultimately monetize complex power assets," Glennan said.

John Kousinioris, President and CEO of TransAlta, noted that the acquisition increases the company's position in Ontario through contracted assets. "As electrification and population growth continues, the market will meaningfully rely on existing firm, dispatchable generation for grid reliability," Kousinioris said.

CIBC Capital Markets acted as financial advisor to Hut 8, and Bennett Jones LLP served as legal counsel to the company.

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