Calpine to issue warrants to existing shareholders to buy 50 million shares of new common stock

By Caroline Salls

Pittsburgh, Dec. 21 - Calpine Corp. said it will issue warrants to purchase 50 million shares of its new common stock to existing common stockholders under its sixth amended joint plan of reorganization.

According to a company news release, the 50 million warrant shares will represent about 10% of the new common stock to be issued under the plan.

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 Calpine said it is expected to be based on a stipulated reorganized equity value of $11.942 billion.

The expiration date of the warrants will be the later of Aug. 25, 2008 or six months after the plan effective date.

Calpine said the specific number of warrants to be issued, the exercise price and expiration date have not yet been determined, and the exercise price is intended to be "out-of-the-money," by an amount that will depend on the market price of the new Calpine common stock.

As previously reported, Calpine's current common stock will be cancelled on the plan effective date.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-60200.

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