Investors line up for post-bankruptcy Calpine

new york -- Hedge fund Harbinger Capital Partners and General Electric Co. have offered to purchase a controlling stake in Calpine Corp. when the power company emerges from bankruptcy, a person familiar with the situation said.

The plan by Harbinger, GE Energy Financial Services and an unnamed private-equity firm would offer an infusion of equity while keeping the company’s debt levels about the same, the person said. The person did not provide details of the proposal, but said Calpine had received more than one bid.

Calpine is likely to reject this proposal and others like it in favor of its own plan, filed with the U.S. Bankruptcy Court in Manhattan in June, said the person, who asked not to be named.

Calpine said in July it had been approached by investors with alternative post-bankruptcy plans. In documents filed with the U.S. Securities and Exchange Commission, Calpine said it would consider competing plans until Aug. 16, then evaluate them briefly.

If Calpine management rejects those plans, the third parties can ask Calpine’s debt and equity holders to vote on their offer.

Calpine did not comment.

Amid the current credit market crunch, it would probably be difficult for a potential suitor to arrange a better debt-financing deal than the one Calpine had already lined up. In June, the San Jose-based company secured $8 billion in loans from a consortium of Wall Street banks at low interest rates, contingent on Calpine emerging from bankruptcy by Jan. 31.

Calpine is one of the largest U.S. non-utility power companies. It has 22,000 megawatts of capacity concentrated in California and Texas.

Shares of Calpine closed up 19 cents at $2.37.