Subject: energy : pg & e bankruptcy ( calpine & mirant ) note
- - - - - - - - - - - - - - - - - - - - - - forwarded by don miller / hou / ect on 04 / 06 / 2001 03 : 24 pm - - - - - - - - - - - - - - - - - - - - - - - - - - -
jon cartwright on 04 / 06 / 2001 01 : 23 : 12 pm
to : " ' rjf energy - gram ' "
cc :
subject : energy : pg & e bankruptcy ( calpine & mirant ) note
> recapping my verbal comments from the 1 : 30 pm call :
>
> * pg & e conf call is 2 : 15 est ( 415 ) 228 - 4835 conf # 5056296
> * calpine has $ 305 million ( pre - tax now that i think about it ) in
> accruals with pg & e as of last week . our numbers and the company ' s
> guidance previously has been that all financial forecasts the firm has
> made exclude those numbers , i . e . any recovery would be a benefit to
> guidance .
> * mirant has never broken out its exposure , but most recent guidance
> excluding pg & e ' s numbers as well . we think mir ' s exposure is close to
> $ 0 . 10 per share , which if ever collected would be additive to estimates .
> * what happens in bankruptcy ? well basically a federal judge will
> precede over the filing and immediately determine operating costs for pg & e
> so that it can remain a going concern . as such , as a letter of the law ,
> operating costs ( which in this case would be purchasing power from cpn ,
> mir , dyn , etc ) are to be kept current . bottom line the credit risks of
> not getting paid go away immediately , net - net cpn and mir will start
> getting paid every day as opposed to accruing revenue like they had been
> doing for the past several months .
> * while the filing has surprised investors , the weakness being
> experienced across the board in the electric power space is way overdone
> in our opinion . we would take advantage of the weakness .
> * we will obviously have more later today and monday , but this is
> actually a positive turn of events for merchant power producers . for pg & e
> bond and common stock owners , that ' s a whole different story .
>
> cpn : sbl
> 2001 eps $ 1 . 80
> 2002 eps $ 2 . 50
> mir sbl
> 2001 eps $ 1 . 60
> 2002 eps $ 1 . 95
>
>
>
> fred schultz - houston
>
>
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jon kyle cartwright
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