Calpine Power Income Fund
TSX : CF.UN

Calpine Power Income Fund

January 30, 2007 09:56 ET

Calpine Power Income Fund Provides Update on Calpine Canada Court Matters

CALGARY, ALBERTA--(CCNMatthews - Jan. 30, 2007) - The Board of Trustees of Calpine Commercial Trust, on behalf of Calpine Power Income Fund (TSX:CF.UN) (the "Fund"), announced that Ernst & Young Inc., the Court appointed monitor (the "Monitor") under insolvency and reorganization proceedings involving certain Calpine Corporation affiliates has recommended that the Court approve a Fund supported offer (the "Supported B Unit Offer") by HCP Acquisition Inc. ("Harbinger") to purchase from Calpine Canada Power Ltd. ("CCPL'), certain partnership interests (the "B Units") in Calpine Power, L.P. ("CLP") and certain management and service agreements (the "Management Agreements") held by CCPL in respect of Fund entities.

Under the Support Agreement entered into between the Fund and Harbinger on January 27, 2007 (the "Support Agreement"), final Court approval of the Supported B Unit Offer (or the Fund's offer for the B Units and Management Agreements) is a condition of Harbinger's obligation to amend the terms of its previously announced take-over bid to, among other things, increase the offer price to $13.00 in cash per trust unit of the Fund (the "Revised Harbinger Offer"). The Support Agreement has been filed on SEDAR (www.sedar.com).

In its 20th report to the Court , the Monitor recommended Court approval of the Supported B Unit Offer over other offers for the same assets of CCPL, including an offer made by the Fund and separate offers previously made by Harbinger and by a third party, which other offers are not supported by the Fund but which remain outstanding. The Monitor's 20th report to the Court is available at http://www.ey.com/ca/calpinecanada.

The Honourable Madam Justice B.E.C. Romaine of the Court of Queen's Bench of Alberta in Calgary is scheduled to hear applications in respect of the offers for the B Units and the Management Agreements, including consideration of the Monitor's recommendation that the Court approve the Supported B Unit Offer, at 10 am Calgary, Alberta time today. There can be no assurance that the required approval by the Court of the Supported B Unit Offer will be obtained and Harbinger will have no obligation to make the Revised Harbinger Offer unless final Court approval of the Supported B Unit Offer (or certain other Fund supported offers specified in the Support Agreement) is obtained.

Under the Support Agreement, Harbinger has agreed to file and mail a Notice of Change amending its take-over bid for the Fund's trust units in order to effect the Revised Harbinger Offer, as soon as possible following receipt of the above-described Court approval. If made, the Revised Harbinger Offer will be open for acceptance for at least 10 days following the mailing of the Notice of Change, and specific details concerning the expiry time of the Revised Harbinger Offer will be contained in the Notice of Change.

Completion of a Revised Harbinger Offer will be subject to certain conditions, including, among other things, a sufficient number of the Fund's trust units being tendered to the offer such that Harbinger would own at least 66 2/3% of the outstanding trust units, receipt of all necessary regulatory approvals and no material adverse changes concerning the Fund.

About Calpine Power Income Fund

Calpine Power Income Fund is an unincorporated open-ended trust that invests in electrical power assets. The Fund indirectly owns interests in power generating facilities in British Columbia, Alberta and California. In addition, the Fund owns a participating loan interest in a power plant in Ontario and has made a loan to Calpine Canada Power Ltd. The Fund is managed by Calpine Canada Power Ltd., which is headquartered in Calgary, Alberta. The Fund has 61,742,288 Trust Units outstanding.

BMO Capital Markets is acting as financial advisor to the Fund and Blake, Cassels & Graydon LLP is acting as legal counsel to the Board of Trustees for the purposes of this transaction.

The Calpine Power Income Fund units are listed on the Toronto Stock Exchange under the symbol CF.UN. For further information on the Fund, please visit its website at www.calpinepif.com or contact:

Forward-Looking Information Disclaimer

This news release may contain forward-looking information or forward-looking statements as defined under applicable securities laws. Such information and statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking information or statements. Such forward-looking information and statements are based on the Fund's current internal expectations, estimates, projections, assumptions and beliefs and the Fund believes the expectations reflected in such forward-looking information and statements are reasonable. However, no assurance can be given that these expectations will prove to be correct and the forward-looking information or statements included in this news release should not be unduly relied upon. Such forward-looking information and statements speak only as of the date of this news release and none of the Fund, the trustees of Calpine Commercial Trust or CCPL undertakes any obligation to publicly update or revise any forward looking information or statements contained in this news release, except as required by applicable laws.

In particular, among other matters, this news release may contain forward-looking information and statements with respect to certain conditions that must be satisfied as a condition of Harbinger making or completing the amended offer. The actual results and outcomes of such matters could differ materially from those anticipated in the forward-looking information and statements contained in this news release as a result of both known and unknown risks, including risks that the required court, regulatory and third party approvals necessary to complete the amended Harbinger offer may not be obtained or that the other conditions to Harbinger's offer may not be satisfied.

Additional risk factors regarding the forward-looking information set forth above, the business and affairs of the Fund and its subsidiaries and an investment in the Trust Units are contained in the Fund's Trustees' Circular dated January 4, 2007, the Fund's annual information form dated April 19, 2006, the Fund's management's discussion and analysis for both the year ended December 31, 2005 and the fiscal quarters ended March 31, 2006, June 30, 2006 and September 30, 2006, and the material change report of the Fund dated November 14, 2006, copies of which are available through the internet on the Fund's SEDAR profile at www.sedar.com. Readers are also referred to the risk factors contained in other documents the Fund files from time to time with securities regulatory authorities, copies of which are also available through the internet on the Fund's SEDAR profile at www.sedar.com.

The forward-looking information contained herein is expressly qualified in its entirety by this cautionary statement.

Notice

This announcement does not constitute or form part of any offer or invitation to purchase, otherwise acquire, subscribe for, sell, otherwise dispose of or issue, or any solicitation of any offer to sell, otherwise dispose of, issue, purchase, otherwise acquire or subscribe for, any security. The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this announcement is released, published or distributed should inform themselves about and observe such restrictions. Neither the Harbinger Offer nor the Revised Harbinger Offer is being made to, nor will deposits be accepted from, or on behalf of, unitholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of such jurisdiction. However, Harbinger or its agents may, in the sole discretion of Harbinger, take such action as Harbinger may deem necessary to extend the Harbinger Offer or the Revised Harbinger Offer to unitholders in any such jurisdiction. This announcement contains certain information relating to the Fund and its subsidiary entities, such information is information of and has been provided by the Fund and is not information of or been provided by Harbinger Capital Partners.

Contact Information

  • Media
    Longview Communications Inc.
    Alan Bayless
    (604) 694-6035
    or
    Media
    Longview Communications Inc.
    David Ryan
    (604) 694-6031
    or
    Investors
    Georgeson
    Toll free: (866) 568-7438