San Jose, CA, April 24, 2006 — In an effort to regroup and focus on its core business, bankrupt Calpine Corp. announced that one of its foreign non-debtor affiliates has completed the sale of its 45-percent equity interest in the 525-megawatt Valladolid III Power Plant, located on the Yucatan Peninsula, Mexico, to the two remaining partners in the project, Mitsui & Co. Ltd. and Chubu Electric Power Co. Inc. (together the “buyers”).
The company announced plans to sell its interest in the plant in March 2006. With this sale, Calpine advances its recently announced program to streamline the company, reduce costs, and strengthen Calpine’s overall organization as part of its bankruptcy restructuring.
Calpine received a cash payment of approximately $43 million, less a 10-percent holdback that the buyers will return after one year. With completion of the sale, Calpine has eliminated its 45-percent share of the non-recourse unconsolidated project debt.
In addition, $9.1 million of Calpine funds held in escrow for credit support for the project were released to Calpine. The company expects to record a non-cash impairment charge of approximately $41 million on its investment in the project for the period ending Dec. 31, 2005, which is a component of the impairment charges announced on April 17, 2006.
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