Calpine Announces Warrant Distribution as Part of Plan of Reorganization



    SAN JOSE, Calif. and HOUSTON, Dec. 21 /CNW/ -- Calpine Corporation (OTC
Pink Sheets:   CPNLQ) announced today that as part of its Sixth Amended Joint
Plan of Reorganization (the "Plan"), it will issue warrants to purchase
approximately 50 million shares of its new common stock, or about 10 percent
of the common stock to be issued pursuant to the Plan, to holders of its
currently outstanding common stock.  Each warrant will represent the right to
purchase a single share of Calpine's new common stock.  The exercise price per
share has not yet been determined, but it is expected to be based on a
stipulated reorganized equity value of $11.942 billion.  For illustrative
purposes, assuming the issuance of 500 million shares on the effective date,
the exercise price would be $23.88 per share.  The expiration date of the
warrants will be Aug. 25, 2008 or the date that is six months after the
effective date of the Plan, which ever is later.  No fractional warrants will
be issued and no cash in lieu of fractional warrants will be distributed.  The
warrants will be transferable, but they will not be listed on any exchange.
    The specific number of warrants to be issued, the exercise price and
expiration date have not yet been determined.  In addition, the exercise
price, when issued, is intended to be "out-of-the-money," although the extent
to which it is or is not "out-of-the-money" will depend on the market price of
the new Calpine common stock, which can not be known at this time.  There can
be no assurance that the warrants will be "in-the-money" at any time prior to
their expiration date.
    The currently outstanding shares of common stock will be cancelled on the
effective date of the Plan and will no longer represent an interest in Calpine
Corporation.
    
    About Calpine
    
    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 our Chapter 11 cases and
Companies' Creditors Arrangement Act (CCAA) proceedings of certain of
Calpine's Canadian affiliates, including our ability to successfully
reorganize and emerge from Chapter 11; (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; (*) 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.




For further information:

For further information: Media Relations, Mel Scott, +1-713-570-4553, 
scottm@calpine.com, or Investor Relations, Norma Dunn, +1-713-830-8883, 
ndunn@calpine.com, both of Calpine Corporation Web Site:
http://www.calpine.com

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CALPINE CORPORATION

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