Calpine asks for approval of amended restructuring agreement with Siemens Power

By Reshmi Basu

New York, Oct. 1 - Calpine Corp. asked for court approval of an amended restructuring agreement with Siemens Power Generation Inc., which would provide the company with product modifications and upgrades for turbine generators and accessories provided by Siemens, according to a Monday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, there have been disputes over the performance of the turbines, which led to a settlement agreement in 2003. However, Calpine said that new conflicts have arisen regarding contractual obligations and rights under the amended accord.

The company said it negotiated with Siemens for several months to modify and clarify certain provisions. Under the second amended agreement:

• Siemens will provide certain replacement parts to Calpine;

• Calpine will receive certain revised warranties and performance guarantees;

• Siemens will make product modifications to the turbines;

• Siemens will have a $6.17 million general unsecured claim against Calpine, which would resolve termination payments to Siemens;

• Siemens will receive a $10.94 million general unsecured claim to compensate for goods and services provided to Calpine prior to the bankruptcy filing; and

• Calpine will be paid $1.81 million, which is the amount left over when all the post-petition amounts due to the parties are calculated.

In addition, the company said the restructuring agreement is necessary in order to avoid a "protracted and highly contentious" litigation.

A hearing is scheduled for Oct. 24.

Calpine, a San Jose, Calif., power company, filed for bankruptcy on Dec. 20, 2005. Its Chapter 11 case number is 05-60200.

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