San Jose, CA, and Houston, TX, Aug. 27, 2007 — Embattled Calpine Corp. announced the company and certain of its subsidiaries have filed an amended plan of reorganization and related disclosure statement with the United States Bankruptcy Court for the Southern District of New York. With the filing, Calpine remains on track to have the amended plan confirmed during the 4th Quarter 2007.
The amended plan maintains the key terms provided under the original plan of reorganization filed by the company in June 2007, but projects greater recoveries for stakeholders in the most likely claims scenario. The amended plan remains a “waterfall” plan that allocates value to the company’s creditors and shareholders in accordance with the priorities of the Bankruptcy Code.
Consistent with the original plan, assuming Calpine’s amended plan is confirmed by December 31, 2007 and subject to the assumptions set forth in the disclosure statement, Calpine estimates that the reorganized Calpine will have a midpoint reorganization value of $21.7 billion (reorganization value is equal to total enterprise value plus estimated available cash). At emergence, Calpine estimates that its total enterprise value will be between $19.2 billion to $21.3 billion, with a midpoint of $20.3 billion, and estimates that distributable cash will be approximately $1.4 billion.
Under the amended plan, allowed claims are anticipated to range from $20.1 billion to $22.0 billion after completion of Calpine’s claims objection, reconciliation, and resolution process. Under the range of potential allowed claims, general unsecured creditors will receive from 95% to 100% of their allowed claims. As a result of the continued refinement of the company’s outstanding claims, it has increased the amount holders of existing equity are projected to receive under the updated “most likely” claims resolution scenario. Calpine currently estimates that the return would be approximately $2.05 per existing share of Calpine common stock (calculated assuming the midpoint of the reorganization value). Because disputed claims and the total enterprise value of Calpine upon its emergence have not yet been finally adjudicated, no assurances can be given that actual recoveries to creditors and interest holders will not be materially higher or lower.
Calpine received a commitment for an amended and upsized exit facility from Goldman Sachs, Credit Suisse, Deutsche Bank, and Morgan Stanley. Calpine will ask the Bankruptcy Court to hold a hearing to consider approval of the amended plan. If the court confirms the new plan, Calpine expects to emerge from Chapter 11 shortly thereafter.
For related articles on the continuing Calpine bankruptcy and recovery, please read these articles:
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