Calpine exits bankruptcy; trading to restart

Calpine Corp. has emerged from Chapter 11 bankruptcy protection, ending a two-year slog in which the power producer slashed one-third of its workforce and sold off a string of plants to help get its finances back in order.

Shares of the San Jose-based company are to begin trading on the New York Stock Exchange next week under the ticker symbol CPN.

Calpine, which officially emerged from bankruptcy protection Thursday, said it would issue as many as 500 million shares of common stock and use $7.3 billion in financing raised from outside sources to repay creditors and take care of other expenses.

Although the creditors will get most of their money back -- 75% to 100% of allowable claims determined by the Bankruptcy Court -- the company’s current stockholders could wind up getting stiffed.

Old Calpine shares will be canceled, and stockholders will get warrants to buy new shares at an exercise price of $23.88 a share -- a price the company’s stock hasn’t reached since 2001. The warrants will expire on Aug. 25.

Calpine’s shares currently trade on the over-the-counter Pink Sheets, where they stood at just 16 cents Friday, down from a peak of nearly $60 in 2001. Soaring electricity prices and sizzling investor interest fueled a boom period for the company, but it descended into bankruptcy protection in 2005 under the weight of a debt-laden expansion that backfired.

Calpine says it sold or turned over nine plants or businesses and cut its head count by 1,096 workers. The company, which now has 2,200 employees, estimates that its remaining businesses, which include a fleet of environmentally friendly power plants, are worth $18.95 billion.

“We are very proud of what we have been able to accomplish over the past two years,” said Robert May, Calpine’s chief executive.

“Calpine is now a stronger, more competitive power company poised for growth in the energy industry.”