Mr. Nathaniel August of Mangrove reports

MANGROVE PARTNERS COMMENCES ACTION AGAINST TRANSALTA

Mangrove Partners, one of the largest shareholders of TransAlta Corp. with aggregate ownership of 7.1 per cent of the company's outstanding shares, has commenced an action in the Ontario Superior Court of Justice against TransAlta, its directors and Brookfield BRP Holdings (Canada).

The action arises out of TransAlta's continued misrepresentation and obfuscation of critical details relating to the upcoming 2019 annual and special meeting of shareholders and the proposed $750-million transaction between the company and Brookfield BRP Holdings.

In the action, Mangrove seeks relief under the oppression remedy provisions of the Canada Business Corporations Act, asking the court to set aside the Brookfield transaction. Mangrove commenced the action following TransAlta's repeated insistence, to both the Ontario Securities Commission and the Alberta Securities Commission, that Mangrove pursue its claims for relief in the courts and not before the commissions.

In its statement of claim, Mangrove outlines the rushed, defensive and improvident nature of the Brookfield transaction, including that the TransAlta special committee was formed less than two weeks before the public announcement of the transaction and that CIBC was not formally engaged as financial adviser until three days before the announcement. The claim also records that TransAlta had rebuffed multiple offers by Brookfield to acquire the entire company over the past several years, only acceding to Brookfield's repeated entreaties when faced with an imminent proxy contest.

Nathaniel August, president and portfolio manager at Mangrove Partners, said: "The TransAlta board has made every effort to obscure the true process by which the Brookfield transaction came to pass and their motives for entrenching themselves at the expense of shareholders. As a large and engaged shareholder of TransAlta, we cannot allow this conduct by the board and its special committee to go unchallenged. So, at TransAlta's own recommendation, we have brought an oppression action and will seek to hold TransAlta accountable to its shareholders."

Added Mr. August: "Under the leadership of chairman Gordon Giffin, TransAlta has generated disastrous total shareholder returns of minus 40 per cent, compared to plus 47 per cent for the TSX. Along with the other members of the special committee, his decision to recommend the Brookfield transaction reflects yet another failure to uphold his fiduciary duties and act in the best interests of shareholders. Consequently, we intend to withhold on all three special committee directors up for election, as we also seek relief in the Ontario courts to set aside an improvident and self-interested transaction and protect the rights of all shareholders."