Calpine Canada Energy Finance ULC announces commencement of proceedings for approval of sale of certain UL1 senior notes held by Calpine Canada Resources Company and for approval of settlement of certain claims relating to UL1 senior notes



    /NOT FOR DISSEMINATION IN THE UNITED STATES OR OVER UNITED STATES
    NEWSWIRE SERVICES/

    CALGARY, June 28 /CNW/ - Calpine Canada Energy Finance ULC ("ULC1")
announces that its affiliate Calpine Canada Resources Company ("CCRC") has
today filed an application with the Court of Queen's Bench of Alberta in the
Judicial District of Calgary (the "Court") for approval of CCRC's intended
sale of its holdings of US$359,770,000 of 8 1/2% Senior Notes due 2008 issued
by ULC1 and guaranteed by Calpine Corporation (the "ULC1 Notes"). The
application is scheduled to be heard by the Court on July 24, 2005. CCRC had
previously commenced proceedings to sell its ULC1 Notes, however those
proceedings were deferred as described in the Fifteenth Report filed by Ernst
& Young Inc., the Court-appointed monitor (the "Monitor") of Calpine
Corporation's Canadian subsidiaries (the "CCAA Debtors") who are the subject
of proceedings commenced on December 20, 2005 pursuant to the Companies'
Creditors Arrangement Act (Canada) (the "CCAA Proceedings"). Both ULC1 and
CCRC are debtors in the CCAA Proceedings. Calpine Corporation is a debtor in
proceedings pending before the United States Bankruptcy Court for the Southern
District of New York under Title 11 of Chapter 11 of the United States Code
(the "U.S. Proceedings").
    The application for approval of CCRC's intended sale of its ULC1 Notes
was filed in conjunction with another application filed by the CCAA Debtors
for approval of certain proposed settlements among Calpine Corporation, the
CCAA Debtors and certain holders of ULC1 Senior Notes, which include a
proposed settlement of the claims filed in the CCAA Proceedings and the U.S.
Proceedings concerning and relating to the ULC1 Notes.
    Copies of the applications filed and further information information
concerning the CCAA Proceedings, ULC1, CCRC, the ULC1 Notes, the proceedings
to date with respect to CCRC's ULC1 Notes and the sale thereof, and copies of
reports filed by the Monitor ("Monitor's Reports"), are available on the
website in respect of the CCAA Proceedings
(http://www.ey.com/ca/calpinecanada). The Monitor's 23rd Report is expected to
be filed and available on the website shortly. Further announcements regarding
these matters will be made as warranted.

    ULC1 is an indirect wholly-owned subsidiary of Calpine Corporation and
was established as a special purpose finance subsidiary of Calpine Corporation
whose primary business is to engage in financing activities to raise funds for
the business operations of Calpine Corporation and its subsidiaries. Calpine
Corporation is a major power company that supplies customers and communities
with electricity from clean, efficient, natural gas-fired and geothermal power
plants. Calpine Corporation owns, leases and operates integrated systems of
plants throughout North America. Calpine Corporation was founded in 1984.

    THE SECURITIES OFFERED HAVE NOT BEEN, AND WILL NOT BE, REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS, AND EXCEPT PURSUANT TO AN APPLICABLE EXEMPTION FROM REGISTRATION
REQUIREMENTS, MAY NOT BE OFFERED, SOLD OR DELIVERED, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES OF AMERICA OR ITS TERRITORIES OR POSSESSIONS OR TO OR FOR
THE ACCOUNT OR BENEFIT OF ANY U.S. PERSON. THIS PRESS RELEASE DOES NOT
CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES NOR SHALL THERE BE ANY SALE OF THE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL.

    This press release may contain forward-looking statements within the
meaning of applicable securities legislation. Any statements that express or
involve discussions with respect to ULC1's expectations, beliefs, intentions,
future events or performance (often using words such as "believes", "expects",
"anticipates" or "intends" or stating that certain actions, events or results
"may", "could", "would", "might" or "will" be taken or achieved) are not
statements of historical fact, but are forward-looking statements. Such
forward-looking statements, by their nature, necessarily involve known and
unknown risks, uncertainties and other factors beyond ULC1's ability to
control or predict, that may cause ULC1 actual results, performance or
achievements to differ materially from the anticipated results, performance or
achievements expressed or implied by such forward-looking statements.
Investors and others should not place undue reliance on these forward-looking
statements as actual results could differ materially from the forward-looking
statements in this press release based on risks associated with: the proposed
sale of the ULC1 Notes, including that such sale may be delayed or may not be
completed; the guarantee of the Notes by Calpine Corporation; any
forward-looking information contained in Monitor's Reports; and other factors
over which ULC1 has no control, including the risks detailed from time to time
in the documents filed by ULC1 with securities regulators. ULC1 does not have
control of the timing, process or outcome of the sale of ULC1 Notes. Calpine
Corporation is a debtor in proceedings pending before the United States
Bankruptcy Court for the Southern District of New York under Title 11 of
Chapter 11 of the United States Code. Monitor's Reports are prepared by Ernst
& Young Inc. in conjunction with its duties as Court-appointed monitor, and
not by ULC1. ULC1 does not undertake or assume any obligation to publicly
update or revise any forward-looking statement, whether as a result of new
information, future events or any other reason.

    %SEDAR: 00016849E




For further information:

For further information: Toby Austin by e-mail at:
toby.austin@calpine.com, or by telephone at (403) 296-1411

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Calpine Canada Energy Finance ULC

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