Calpine to sell 20 plants, cut workforce by 775 to trim
costs
Washington (Platts)--4Apr2006
Calpine Tuesday said it will sell about 20 nonstrategic power plants,
close three of its offices and trim its workforce by 775 employees to cut
costs and make progress to emerge from its Chapter 11 bankruptcy proceeding a
profitable, competitive company.
After a review of the entire company, Calpine identified about 20 plants
in operation or under construction that it no longer considers core to its
operations due to a number of factors, including financial performance,
market prospects and strategic fit. The San Jose, California-based company
said it will be seeking to sell the majority of those assets by the end of
2006. Further information on what plants have been selected by the company was
not provided.
"At the completion of this effort, Calpine expects to retain a generating
portfolio of clean and reliable geothermal and natural gas-fired power plants
located in key North American markets," the company said.
Calpine, which filed for Chapter 11 bankruptcy protection in December,
also said it will close offices in Atlanta, Boston and Dublin, California.
Day-to-day business operations will be primarily consolidated into Calpine's
headquarters in San Jose and offices in Houston and Folsom, California.
On the staff reduction of 775, about 100 employees will be immediately
affected, with the remainder of the workforce cuts to take place by the end of
the year. "We're making the tough decisions that are essential for Calpine to
emerge from bankruptcy a viable and valuable enterprise," Calpine CEO Robert
May said in a statement.
Along with cost-cutting actions announced in February, Calpine said the
actions announced Tuesday will reduce annual costs by more than $150 million.
---Tom Tiernan, tom_tiernan@platts.com
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