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7 December 2006 -- Calpine Corp. announced that it has received approval from the U. S. Bankruptcy Court, Southern District of New York for the sale of the company's 590-MW Aries Power Plant to Kelson Holdings, LLC for $233.6 million. The transaction, subject to certain regulatory approvals, is expected to close within the next 30 to 60 days.
"Calpine continues to make significant progress with our restructuring efforts and in divesting of non-core power assets. This transaction represents another positive step towards our goal of emerging from Chapter 11 a stronger, more competitive power company," said Robert P. May, Calpine's Chief Executive Officer. "In addition to enhancing Calpine's liquidity and reducing project debt, the Aries sale is consistent with our strategy of focusing our resources on core power assets in our key power markets where Calpine can best compete."
In October, Calpine received Court approval to proceed with the sale process for Aries and initially obtained a $158.5 million bid from Aquila, Inc. In accordance with asset sales procedures approved by the Bankruptcy Court, Calpine held an auction on Dec. 4, 2006 to allow other potential buyers to bid on the asset. At the conclusion of this auction, Kelson Holdings, LLC was selected as the winning bidder.
Calpine will utilize the $233.6 million in proceeds to repay approximately $191 million of project-related debt that includes all outstanding principal, accrued interest and other debt claims. The Aries facility is a natural gas-fired, combined-cycle power plant located in Pleasant Hill, Mo. that has been in operation since 2001.
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