Emerges as a Stronger, More Competitive Power Company Poised for
Growth SAN JOSE, Calif. and HOUSTON, Jan. 31 /PRNewswire-FirstCall/
-- Calpine Corporation (Pink Sheets: CPNLQ; NYSE: CPN) announced
today that it has successfully emerged from Chapter 11 bankruptcy
protection. The company officially concluded its Chapter 11
reorganization after meeting all statutory requirements of the
company's Sixth Amended Joint Plan of Reorganization, including
successfully closing its $7.3 billion exit financing facility that
includes a one-year, $300 million bridge facility that is expected
to be paid by the end of the first quarter. Calpine's Plan was
confirmed by the United States Bankruptcy Court for the Southern
District of New York in an order entered on December 19, 2007.
Calpine's stock is expected to begin "regular way" trading on the
New York Stock Exchange on or about February 5, 2008 under the
ticker symbol CPN. "This is a wonderful day for all of us at the
new Calpine," said Robert P. May, Calpine's Chief Executive
Officer. "We are very proud of what we have been able to accomplish
over the past two years. Calpine is now a stronger, more
competitive power company poised for growth in the energy industry.
We are well positioned for future success, with a healthy balance
sheet and a $7.3 billion exit financing facility. On behalf of the
Board and management team, we would like to thank the nearly 2,200
Calpine employees for their hard work, perseverance and dedication
over the past two years. We'd also like to thank our customers,
business partners and the communities we serve for their support
throughout this process." Gregory L. Doody, Calpine's General
Counsel, who has also served as the company's Chief Restructuring
Officer, said, "Calpine's restructuring was truly remarkable. In
just over two years Calpine dramatically improved its capital
structure, reducing approximately $7.2 billion in debt while
generating a significant recovery for our creditors as a whole. In
addition, we enhanced and streamlined our core power generation
business. Together, these financial and operating improvements have
laid a strong foundation for the future success of Calpine, its
stakeholders, customers and employees." The Court approved
Calpine's new nine-member Board of Directors, on November, 20,
2007. The Directors are: -- William J. Patterson -- Chairman of the
Board. -- Frank Cassidy -- Member, Compensation Committee. --
Kenneth Derr -- Chair, Compensation Committee. -- Robert C.
Hinckley -- Member, Audit Committee and Member, Nominating and
Governance Committee. -- Robert P. May -- Chief Executive Officer
-- David Merritt -- Chair, Audit Committee. -- W. Benjamin Moreland
-- Member, Audit Committee. -- Denise M. O'Leary -- Chair,
Nominating and Governance Committee. -- J. Stuart Ryan -- Member,
Compensation Committee. Under the Plan, Calpine intends to issue a
total of 485 million shares of reorganized Calpine common stock to
holders of allowed claims. The reorganized Calpine common stock
will trade on the New York Stock Exchange under the ticker symbol
CPN. Calpine anticipates that it will make initial distributions
under the Plan to holders of allowed claims and interests on or
before February 10, 2008. In addition to the 485 million shares,
Calpine will reserve 15 million shares for distribution pursuant to
the terms of Calpine's Management and Director Equity Incentive
Programs, which will be implemented pursuant to the terms of the
Plan. In its first distribution, Calpine currently anticipates
distributing on account of allowed unsecured claims approximately
423 million shares of reorganized Calpine common stock, each with
an imputed value of $17.36 based upon a $8.7 billion reorganized
equity value and the face value of the exit financing. Calpine
currently estimates in connection with its first distribution that:
(1) general unsecured creditors will receive approximately 84.8
percent of their allowed claims for principal and pre-petition
interest; (2) holders of the 7.625 percent Senior Notes Due 2006,
7.75 percent Senior Notes Due 2009, 7.875 percent Senior Notes Due
2008, 8.75 percent Senior Notes Due 2007, and 10.5 percent Senior
Notes Due 2006 (the "Senior Notes") will receive approximately
100.0 percent of their allowed claims for principal and
pre-petition interest; and (3) holders of the 7.75 percent
Contingent Convertible Notes Due 2015 (the "Subordinated Notes")
will receive approximately 42.0 percent of their allowed claims for
principal and pre-petition interest. In connection with its first
distribution, Calpine also intends to set aside 62 million shares
of reorganized Calpine common stock on account of disputed
unsecured claims. As claims are resolved, Calpine will make further
distributions of reorganized Calpine common stock on a periodic
basis in accordance with the terms of the Plan. Based upon the
$18.95 billion total enterprise value of Calpine set forth in the
Plan and Calpine's current litigation-risk assessment of allowed
claims, Calpine currently estimates that: (1) general unsecured
creditors will ultimately recover approximately 99.9 percent of
their allowed claims for principal and pre-petition interest; (2)
holders of the Senior Notes will ultimately recover approximately
100.0 percent of their allowed claims for principal and
pre-petition interest; and (3) holders of the Subordinated Notes
will ultimately recover approximately 75.0 percent of their allowed
claims for principal and pre-petition interest. In accordance with
the Plan, post-petition interest on the Senior Notes and certain
related claims will be held in escrow pending the resolution of the
Intercreditor Subordination Dispute between the holders of the
Senior Notes and holders of the Subordinated Notes described in
detail in the Plan. The recoveries for the holders of the Senior
Notes and holders of the Subordinated Notes under the Plan depend,
in part, on the resolution of the Intercreditor Subordination
Dispute. Calpine's estimates regarding the ultimate recoveries
under the Plan for the holders of the Subordinated Notes set forth
above assume that the holders of the Senior Notes will prevail in
the Intercreditor Subordination Dispute, although Calpine currently
has not yet taken any position with respect to such dispute. As
part of the Plan, Calpine's old common stock will be cancelled and
holders of the old common stock will receive warrants to purchase
new Calpine common stock. These warrants will be for an aggregate
of approximately 48.5 million shares of new Calpine common stock
and will have an exercise price of $23.88 per share. Cashless
exercises will not be permitted. The warrants will expire on August
25, 2008. The warrants will be distributed to the holders of the
old Calpine common stock pro rata based on the number of shares of
old Calpine common stock held at the time of cancellation.
Fractional warrants will not be issued. Calpine Board of Directors:
Frank Cassidy. Prior to his retirement in 2007, Mr. Cassidy was
employed at Public Service Enterprise Group, Inc., an energy and
energy services company headquartered in New Jersey, since 1969.
From 1999-2007, Mr. Cassidy served as President and Chief Operating
Officer of PSEG Power LLC, the wholesale energy subsidiary of PSEG,
which includes PSEG Nuclear, PSEG Fossil and PSEG Energy Resources
& Trade. From 1996-1999, Mr. Cassidy was President and Chief
Executive Officer of PSEG Energy Technologies, Inc. Prior to such
time, Mr. Cassidy held various positions of increasing
responsibility at the Public Service Electric and Gas Company. Mr.
Cassidy earned an M.B.A. from Rutgers University in 1974 and has an
electrical engineering degree from the New Jersey Institute of
Technology. He serves on the Compensation Committee. Kenneth Derr.
Mr. Derr formerly served as Calpine's Chairman of the Board and has
been an independent Calpine director since May 2001. In addition,
Mr. Derr served as Acting CEO prior to the tenure of current CEO
Robert P. May. He retired as the Chairman and Chief Executive
Officer of Chevron Corporation in 1999, a position that he held
since 1989, after a 39-year career with the company. Mr. Derr
obtained a Master of Business Administration degree from Cornell
University in 1960 and a Bachelor of Mechanical Engineering from
Cornell University in 1959. In addition, he serves as a director of
Citigroup, Inc. and Halliburton Co. Mr. Derr is chair of the
Compensation Committee. Robert C. Hinckley. Mr. Hinckley previously
served as Vice President, Strategic Plans and Programs, General
Counsel and Secretary, and Chief Operating Officer for Xilinx,
Inc., a supplier of programmable logic solutions in San Jose, CA.
From 1988 to 1990, Mr. Hinckley was Senior Vice President and Chief
Financial Officer of Spectra Physics, Inc., a supplier of laser
products. Mr. Hinckley serves on the boards of directors of several
private companies and holds a B.S. in engineering from the U.S.
Naval Academy and a J.D. from Tulane University Law School. He
serves on the Audit Committee and the Nominating and Governance
Committee. Robert P. May. Mr. May joined Calpine as CEO in December
2005. Over the past 30 years Mr. May has served in various senior
management and executive positions, including non-executive
Chairman of the Board of HealthSouth from July 2004 to October
2005, and as interim President and CEO of Charter Communications,
January 2005 to August 2005. From March 2003 to May 2004, he served
as HealthSouth's interim CEO, and as interim President of its
outpatient and diagnostic division, from August 2003 to January
2004. At Cablevision Systems Corp., where Mr. May was COO and a
Director from 1996 to 1998, he was part of an executive team that
helped transition the company through new operating strategies and
the use of new technologies. He also serves as a member of Charter
Communications' Board of Directors and Deutsche Bank Americas'
Advisory Board. David Merritt. Since October 2007 Mr. Merritt has
served as Senior Vice President and Chief Financial Officer at
iCRETE LLC, a technology company in the building materials
industry. He served as Managing Director of Salem Partners, LLC, an
investment-banking firm, from October 2003 until September 2007. He
has been on the boards of Charter Communications and Outdoor
Channel Holdings, Inc. since 2003. He also served as a director of
Laser-Pacific Media Corporation from January 2001 through October
2003, and served as chairman of its audit committee. He was with
KPMG LLP for 24 years, serving in a variety of capacities during
his years with the firm, including 14 years as a partner. Mr.
Merritt earned a Bachelor of Science degree in business and
accounting from California State University - Northridge. Mr.
Merritt is chair of the Audit Committee. W. Benjamin Moreland. Mr.
Moreland has served as Executive Vice President and Chief Financial
Officer of Crown Castle International Corporation, which provides
broadcast, data and wireless communications infrastructure services
in Australia, Puerto Rico, and the U.S. and has served in other
senior executive roles at Crown Castle since starting there in
1999. From 1984 to 1999, Mr. Moreland was employed by Chase
Manhattan Bank, serving in various roles of increasing
responsibility in corporate finance and real estate investment
banking. Mr. Moreland earned an M.B.A. from the University of
Houston in 1988 and has a finance degree from the University of
Texas, Austin. Mr. Moreland was appointed to the board of directors
of Crown Castle International Corporation in 2006. He serves on the
Audit Committee. Denise M. O'Leary. Since 1996, Ms. O'Leary has
been a private venture capital investor in Woodside, California.
From 1983 to 1996, Ms. O'Leary was an associate, then general
partner, at Menlo Ventures, a venture capital firm that provides
long-term capital and management services primarily to
development-stage companies in such industries as Internet
infrastructure, semiconductors, software, financial services, and
computer hardware. Prior to 1983, Ms. O'Leary held various
positions of increasing responsibility in manufacturing engineering
and management positions at Spectra Physics, Inc. Ms. O'Leary
earned an M.B.A. from Harvard Business School in 1983 and has an
industrial engineering degree from Stanford University. She is also
a director at Medtronic, Inc. and US Airways Group, Inc. She serves
as chair of the Nominating and Governance Committee William J.
Patterson. Mr. Patterson is a managing director of SPO Partners
& Co., a private investment partnership that he joined in 1989.
SPO may initially hold more than 10 percent of the Company's common
stock and may be considered an affiliate of the Company. From 1985
to 1987, Mr. Patterson was a financial analyst at Goldman, Sachs
& Co., where he was involved in structuring and arranging
financing for leveraged buyouts and in privately placing debt and
equity securities. He also served as a director of Plum Creek
Timber Company, the largest private timberland owner in the United
States, from December 1992 to May 2003. Mr. Patterson earned his
M.B.A. in 1989 from the Stanford Graduate School of Business and
received his A.B. from Harvard College in 1984. He is Board Chair
of the California Academy of Sciences, Chair of the Investment
Committee of the Marin Community Foundation, Vice Chair of the
Stanford Business School Trust and a former trustee and board
president of the Bay Area Discovery Museum. Mr. Patterson is also a
Henry Crown Fellow of the Aspen Institute. In addition to serving
as Chairman of the Board, he is a member of the Nominating and
Governance Committee. J. Stuart Ryan. Mr. Ryan has been the owner
and President of Rydout LLC, an investment firm focused on the
energy sector, since February 2003. He also has been a venture
partner with SPO Partners & Co., a private investment
partnership, since 2003. SPO may initially hold more than 10
percent of the Company's common stock and may be considered an
affiliate of the Company. From 1986 through 2003, Mr. Ryan held
various management positions with The AES Corporation, a global
power company, including Executive Vice President from February
2000 and Chief Operating Officer from February 2002. He also served
as Chairman of the Board of Directors of Indianapolis Power &
Light, and as a director of AES Gener, a publicly listed company in
Chile. Mr. Ryan is a graduate of the Harvard Business School and
has a Chemical Engineering degree from Lehigh University. He
currently serves on Lehigh's Global Council and is Chairman of its
Asa Packer Society and is also a director of O&M Solutions, a
company based in Mauritius that provides technical services to
companies developing, constructing and operating power plants in
Asia, the Middle East and Africa. He serves on the Compensation
Committee. Calpine Corporation is helping meet the needs of an
economy that demands more and cleaner sources of electricity.
Founded in 1984, Calpine is a major U.S. power company, currently
capable of delivering nearly 24,000 megawatts of clean,
cost-effective, reliable, and fuel-efficient electricity to
customers and communities in 18 states in the U.S. The company
owns, leases, and operates low-carbon, natural gas-fired, and
renewable geothermal power plants. Using advanced technologies,
Calpine generates electricity in a reliable and environmentally
responsible manner for the customers and communities it serves.
Please visit http://www.calpine.com/ for more information. Forward
Looking Statement In addition to historical information, this
release contains forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange
Act. We use words such as "believe," "intend," "expect,"
"anticipate," "plan," "may," "will" and similar expressions to
identify forward-looking statements. Such statements include, among
others, those concerning our expected financial performance and
strategic and operational plans, as well as all assumptions,
expectations, predictions, intentions or beliefs about future
events. You are cautioned that any such forward-looking statements
are not guarantees of future performance and that a number of risks
and uncertainties could cause actual results to differ materially
from those anticipated in the forward-looking statements. Such
risks and uncertainties include, but are not limited to: (i) the
risks and uncertainties associated with the ability to successfully
implement Calpine's Plan of Reorganization as confirmed; (ii) our
ability to implement our business plan; (iii) financial results
that may be volatile and may not reflect historical trends; (iv)
seasonal fluctuations of our results; (v) potential volatility in
earnings associated with fluctuations in prices for commodities
such as natural gas and power; (vi) our ability to manage liquidity
needs and comply with covenants related to our existing financing
obligations and anticipated exit financing; (vii) the direct or
indirect effects on our business of our impaired credit including
increased cash collateral requirements in connection with the use
of commodity contracts; (viii) transportation of natural gas and
transmission of electricity; (ix) the expiration or termination of
our power purchase agreements and the related results on revenues;
(x) risks associated with the operation of power plants including
unscheduled outages; (xi) factors that impact the output of our
geothermal resources and generation facilities, including unusual
or unexpected steam field well and pipeline maintenance and
variables associated with the waste water injection projects that
supply added water to the steam reservoir; (xii) risks associated
with power project development and construction activities; (xiii)
our ability to attract, retain and motivate key employees; (xiv)
our ability to attract and retain customers and contract
counterparties; (xv) competition; (xvi) risks associated with
marketing and selling power from plants in the evolving energy
markets; (xvii) present and possible future claims, litigation and
enforcement actions; (xviii) effects of the application of laws or
regulations, including changes in laws or regulations or the
interpretation thereof; and (xix) other risks identified from
time-to-time in Calpine's reports and registration statements filed
with the SEC, including, without limitation, the risk factors
identified in its Annual Report on Form 10-K for the year ended
December 31, 2006 and Quarterly Reports on Form 10-Q. Actual
results or developments may differ materially from the expectations
expressed or implied in the forward-looking statements and Calpine
undertakes no obligation to update any such statements. Unless
specified otherwise, all information set forth in this release is
as of today's date and Calpine undertakes no duty to update this
information. For additional information about Calpine's chapter 11
reorganization or general business operations, please refer to
Calpine's Annual Report on Form 10-K for the fiscal year ended
December 31, 2006, Calpine's Quarterly Reports on Form 10-Q, and
any other recent Calpine report to the Securities and Exchange
Commission. These filings are available by visiting the Securities
and Exchange Commission's website at http://www.sec.gov/ or
Calpine's website at http://www.calpine.com/. DATASOURCE: Calpine
Corporation CONTACT: Media Relations, Mel Scott, +1-713-570-4553, ,
or Investor Relations, Norma Dunn, +1-713-830-8883, , both of
Calpine Corporation Web site: http://www.calpine.com/
Copyright