NYSE to Delist Calpine Amid Bankruptcy Fears

The New York Stock Exchange on Monday said it would delist Calpine Corp. , driving one of the country's biggest power producers to the over-the-counter market amid looming fears of bankruptcy.

Calpine, carrying a debt load of $17 billion, has struggled with a credit crunch and weak merchant power markets since the California energy crisis and the collapse of Enron in 2001. The company, which spent aggressively in the 1990s to become a top power producer, has shed assets to cut its debt.

Calpine shares were trading at a paltry 20 cents Monday morning, down 8 cents from their Friday close. "The death watch continues, with very little hope that it can end in other than a Chapter 11 (bankruptcy) filing," CreditSights analyst Dot Matthews said in a research note.

Some analysts had expected Calpine to file for bankruptcy over the weekend.

The shares, which the company said will now trade over-the-counter, have lost 88 percent of their value since a crucial Delaware court ruling against Calpine on Nov. 22.

The NYSE said it would suspend trading in the share before the market opens on Tuesday. Calpine has the right to ask for a review of the proposed suspension, though it was not clear if the company would make such a request. It was also not clear if the delisting would have any impact on the terms of any Calpine debt.

A spokeswoman for the company was not immediately available to comment.

The Delaware court ruled that Calpine misspent asset sale proceeds to buy fuel for its plants, and the company was ordered to repay the funds.

Calpine has until Jan. 22 to repay the $311.8 million, plus interest, that it misspent on fuel. Between now and then, it can use the money to buy certain kinds of physical assets, and to buy back first-lien debt.

As of Jan. 22, it must repay whatever it has not spent, and then use that money to launch a tender offer for its second-lien debt.

Calpine had sought more time to make the repayments. It said last week it would appeal the order on the timing of the repayments to the Delaware Supreme Court.

"The judge was not sympathetic at all to (Calpine), despite earlier pronouncements that he didn't want to be the agent that drove (the company) to bankruptcy. He appears, by his statements, to have concluded that (Calpine) accomplished that all on its own, without any help from him," Matthews said.